Foreign Currency account balance difference between Transaction view & Account view

vic_omwanda123vic_omwanda123 Member Posts: 7

Dear all hope you have been fine. I am writing from Kenya where Wave is really BIG. One challenge I am having is with my EURO Bank account. On the Transaction view, the Closing balance is EUR 269 which is translated correctly to the home currency of KShs 30,000. However on the Trial Balance and Balance Sheet view the home currency is shown as KShs 170,000 which is materially different.

Kindly advice how I can rectify this so that the Trial Balance and Balance Sheet also show as KShs 30,000 and not KShs 170,000.

Thank you.

edited November 13, 2019 in Accounting Technical Support

Comments

  • AlexLAlexL Administrator Posts: 1,091 admin

    Hey @vic_omwanda123 . Glad to hear Wave is so loved out in Kenya!

    Can you send me some screenshots of all of these different balances? I just want to get a better idea of what we're dealing with here.

  • vic_omwanda123vic_omwanda123 Member Posts: 7

    Thank you for your email Alex. Kindly see attached the 2 screenshots.

    Thank you for your continued assistance.

  • vic_omwanda123vic_omwanda123 Member Posts: 7

    Hi! AlexL. Kindly advice if your were able to decipher the cause of the difference. Thank you for your continued assistance

  • AlexLAlexL Administrator Posts: 1,091 admin

    Hey @vic_omwanda123 . There are numerous factors that go into determining these numbers. The Balance Sheet will always post all transactions from the start of your business until X (the date set in the filter). With a screenshot, can you confirm the filtered date of your report?

  • vic_omwanda123vic_omwanda123 Member Posts: 7

    Dear @AlexL if you are fine with it kindly log into our WaveAccount [email protected] and review. Thank you for your continued assistance

  • vic_omwanda123vic_omwanda123 Member Posts: 7

    Dear @AlexL kindly see a screenshot of the General Ledger view. The Euro amount is correct at Euro 269.09 but the Kenya shilling amount of KShs 170,075.94 which is also the figure in the balance sheet is different from the EURO bank statement in the transaction view of EURO 269.09 translated to the correct Kenya Shillings amount of KShs 30,307.08

    edited November 19, 2019
  • vic_omwanda123vic_omwanda123 Member Posts: 7

    Hi! @AlexL hope you have been fine. Kindly advice if you were able to decipher the cause of the difference in the cash balance as per the cashbook and that in the general ledger/ balance sheet. Thank you

  • AlexLAlexL Administrator Posts: 1,091 admin

    @vic_omwanda123 This definitely looks unusual. I've reached out to our Accounting team so they can take a deeper look into where these numbers are coming from. As soon as I hear back from them, I'll let you know :)

  • AlexLAlexL Administrator Posts: 1,091 admin

    Hey @vic_omwanda123 . So the discrepancy here is that the transactions page drop-down menu bases the running balance off of today's exchange rate, where as the reports page bases it off of the exchange rate on the day the transaction was made. Because these transactions are from 2015, the thought is that the exchange rate is so different from 4 years ago, that this equals the ~140k difference in balance.

  • vic_omwanda123vic_omwanda123 Member Posts: 7

    @AlexL thank you for your message. The transactions are all dated 2015 so even if they are being posted in 2019 there should be no effect. We have checked the system translation rates for the transaction page postings are comparable to those on Oanda.com and don't have any issues with those. The error is with the daily ending translated Kenya Shillings balances as when we divide with the EURO cash book amount, the derived exchange rate is not comparable to the exchange rates on Oanda.com. See attached screenshot. Intriguingly the running balances in Euro and Kenya Shillings are correct. Kindly ask the developers to check and advice. For 2014 postings we did not have a similar issue.

    edited November 25, 2019
  • markcareymarkcarey Member Posts: 1

    @AlexL I am having this same issue. I figured out that the balance sheet view was basing the "ending balance" by adding the currency-converted amounts of all the transactions during the period. This leads to the incorrect "ending balance". This seems to be bug. A balance sheet is supposed to show the value of an asset at a point in time. The the way the "ending balance" is calculated in Wave does not accurately reflect the value of the account at the end of the period. Instead, it would seem to make more sense that the "balance" column and the "ending balance" should always be calculated by currency-converting the foreign (non-base currency) balance value each time, rather than adding the individual converted transaction values.

    Perhaps related, I noticed the following help doc has gone missing:
    https://support.waveapps.com/hc/en-us/articles/115002003143-Foreign-exchange-gains-and-losses-in-foreign-currency-bank-accounts

  • AlexLAlexL Administrator Posts: 1,091 admin

    Hi @vic_omwanda123 . Few things to touch on here. We don't use Oanda.com for currency exchange rates as our rates come directly from XE.com. For this reason, I can't comment on Oanda rates.

    As I mentioned earlier, the Transactions page does not take the date into account when calculating the home currency balance of a foreign currency account. It bases it off of today's exchange rate, specifically from xe.com. If you don't agree with this rate, I would only use the Reports page rates, as these are pulled from the date the transaction was posted (2015), and you did mention that they look correct.

    Hey @markcarey . I'm going to check in with our Accounting team to get you some more info on this. I'll give you an update as soon as I know more.

    edited December 3, 2019
  • AlexLAlexL Administrator Posts: 1,091 admin

    Hi @markcarey . I talked to the team and it looks like this isn't a bug in the system. Moving forward though, as we work to move the remaining handful of users on the old platform to the new one, we'll be working towards making our foreign exchange functionality a lot more robust to address some of the limitations that the system currently has. With this new functionality, we'll also release new Help Center articles. Hang in there, as we're hoping to have this functionality available some time in the new year!

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