Local Currency Adjustments

What is it and what is it for?

Ledger accounts you keep in a foreign currency (bank, cash, receivables or payables in dollars or another currency) store two values for every movement: the amount in the foreign currency and its equivalent in your functional currency. That local-currency equivalent is normally calculated on its own, from the exchange rate of each transaction or from a Foreign Currency Reevaluation.

Sometimes you need to correct only that local-currency value — for example, to adjust a rounding difference, reconcile a one-off difference with your bank, or fix a data-entry mistake — without altering the foreign-currency balance that is already correctly recorded. That's what this screen is for: you record an entry with the accounts and amounts (in local currency) you want to adjust, and AdmCloud updates only the local balance of those accounts.

• The entry is made up of free-form lines: you choose the account, the amount and, if applicable, the division, department, item class and location of each line.
• Only the local-currency balance is affected; the account's foreign-currency balance stays the same.
• Just like a regular Journal Entry, the sum of all lines must be zero (debits = credits).

How to use this screen

1. Browse the list. From Accounting open Local Currency Adjustments to see the ones already recorded, filter by date or subsidiary, and customize which columns you see (for example show Reference or the Voided status, both hidden by default).
2. Create a new adjustment. Use the New button. AdmCloud defaults the Subsidiary, Location and Currency to your company's defaults, with the exchange rate in effect at that moment, but you can change them.
3. Build the adjustment's lines. In the accounts table, add one line per account you want to adjust: choose the Account, optionally the Division, Department, Item Class and Location (depending on which modules you use as profit centers), and the Amount in local currency (positive to debit, negative to credit, or the reverse depending on your accounting convention). AdmCloud automatically adds new rows as you fill in the last one.
4. Check the total. The Total field, below the table, must be zero before you can save.
5. Save the document. Using the Save button. AdmCloud numbers the document automatically (if you leave the number blank) and updates the local balance of every affected account.
6. Review the detail. From the detail screen you can duplicate the adjustment, edit it, void it or delete it depending on your permissions, attach supporting files, and view the change log.
7. Print the document. Use the Print button on the detail screen to get a printable format with the adjustment's lines and total.

Key fields

Validations on save

• The sum of the lines must be zero. AdmCloud rejects the document if the accounts' amounts don't balance against each other (debits = credits).
• It must have at least one line with a non-zero amount. An adjustment with no accounts cannot be saved.
• Each line's account must exist and be active. Inactive accounts are not accepted.
• Division, Department, Item Class and Location, when the account is an income/expense account or your configuration requires them, are mandatory on that line; if you leave them blank, AdmCloud tells you which account is missing the data.
• The accounting period must be open. You cannot create, edit, void or delete an adjustment dated within an already-closed Accounting period.
• The document number cannot be changed once the adjustment has been created.
• An already-voided adjustment cannot be edited.
• It cannot be edited if its movements are already reconciled in a Bank Reconciliation; you must first undo the corresponding reconciliation.
• It cannot be deleted or voided if it has dependent records linked to its accounting entry.
• Another document with the same number cannot be recorded within this adjustment type.

Availability and permissions

This screen belongs to the Accounting module and requires your company to have multi-currency enabled; if your plan only allows a single currency, you will not see this option. That requirement is met by companies on the Standard plan and above (Standard, Premium, Premium Plus, Premium Plus Payroll or Enterprise), as long as they also have more than one currency configured under Currencies. On the Enterprise edition, the Accounting module must also be active among your account's enabled modules.

Access is controlled with the Journal Entries permission on the user group (shared with Journal Entries and Foreign Currency Reevaluations): the browse level is needed to view the list and detail, the add level to create new adjustments, the edit level to modify them, the delete level to delete them, and the void level to void them.

Tips and common mistakes