How bank lines, statements and rates fit together

Banks, cash and currencies brings together the bank and cash journals of Accounting and the currency rate engine of Jaah. This page explains what happens behind the screens, so that the balances and the open items make sense.

One journal per bank account

Each bank account and each cash box is a journal of type Bank or Cash, with its card on the dashboard. The journal has a default account, the bank or cash account of the chart, and a suspense account. Journals themselves are explained in Create a journal.

A transaction waits on the suspense account

Recording a transaction posts a journal entry at once: the bank account on one side, the Bank Suspense account on the other. The bank account is right from that moment, since the money did move; the suspense account holds the other side until you say what the money was for. Matching replaces that suspense line with the real counterpart: the customer's receivable, the vendor's payable, a payment, or an expense through a write-off. Until then the transaction counts in N to reconcile on the card.

Payments go through outstanding accounts

A payment, registered from an invoice or recorded on its own, does not post on the bank account either. It posts on Outstanding Receipts for money received or Outstanding Payments for money paid, because the bank has not shown it yet. Two matchings follow:

The first one marks the invoice paid. The second one confirms that the money reached the bank and removes the payment from the Payments line of the card. In this version the bank reconciliation screen does not open, so only the first matching can be done: see Match payments and invoices.

Statements are a check

A statement groups the transactions of a period between a Starting Balance and an Ending Balance copied from the bank. It changes no entry: it checks them. A statement is complete when its lines bring the starting balance to the ending balance, and valid when its starting balance equals the ending balance of the previous statement. When either check fails, its name shows in red in the transactions list. The Balance of the card starts from the ending balance of the latest statement and adds the transactions recorded after it.

Reconciliation models

A reconciliation model is a ready-made write-off: an account and a label to use when a small difference remains, such as bank fees. The package installs two of them, Internal Transfers and Bank Fees, both applied by hand in the write-off window of Match payments and invoices.

Currencies and rates

The currency of the company is the reference. Every other active currency has rates, one per date and per company, written as units of that currency for one unit of the company's currency. An invoice in a foreign currency keeps both amounts: the foreign one, and the company's one at the rate of the invoice's date. When it is paid at another rate, the difference goes to the exchange difference accounts set in Banks, cash and currencies settings. The revaluation of open foreign amounts at the end of a period belongs to Accounting reports.

The rates come from the providers. When a company is created, and when the app is installed, each company receives three of them: the European Central Bank first, then the Central Bank of the UAE, then ExchangeRate-API, all daily. Every day, for each company whose automatic update is on, the providers are asked in their order. The currencies needed are the active ones with Automatic Update on, plus the company's own; each currency is taken from the first provider that publishes it, so the same rate is never asked twice. Each run of a provider writes one line in the log, and the provider's success and failure counts and its health follow the results.

What this app does not do

• It does not connect to a bank or import statement files: transactions are typed.
• It does not match bank transactions in this version, since the bank reconciliation screen does not open; matching payments with invoices works.
• It does not use a paid rate service, and it gives no rate for a currency that none of the providers publishes.
• It does not fetch past days from the Central Bank of the UAE or ExchangeRate-API, which publish the latest day only.
• It does not change entries already posted: their amounts in the company's currency stay those computed when they were posted.

Who may do what

Each company keeps its own journals, statements, switch and providers.