International Currency Reconciliation

You don’t need to be in Brazil to sell in Brazil. But you do need to solve the FX and reconciliation mess. A few months ago, a Colombian edtech hit a familiar wall. They wanted to launch some of their courses for Brazilian students. Product was solid. Demand wasn’t the problem. The real blocker? Getting paid. PIX is everywhere — but only if you have a local entity. Traditional processors were expensive, slow, and turned reconciliation into a full-time job. The team wanted to focus on product and distribution, not spreadsheets and settlement reports. That’s where Avenia came in. Instead of setting up a Brazilian subsidiary, the edtech integrated Avenia’s API. Now, when a student pays via PIX, the company receives BRLA (a BRL-pegged stablecoin) instantly. Avenia converts it to USDC — all within the same stack — and settles directly to their treasury. Even better: reconciliation is automated. Each payment comes tagged with metadata the company defines. No latency. No FX surprises. No end-of-month chaos. They didn’t change their product. Just their infra. The result? Faster liquidity. Transparent rates. A finance team that can finally breathe. Cross-border payments shouldn’t feel like paperwork from the 90s. They should be as simple — and programmable — as sending a message.

🤝 Intercompany Reconciliation Made Simple! 🌍 Across Borders, Across Books — Let’s Align the Numbers! When multiple entities under the same group transact with each other, intercompany reconciliation becomes critical — not just for accuracy, but for audit, compliance, and group reporting integrity. 📊 Here’s how to handle it effectively, especially when entities have different functional currencies 💱👇 ⸻ 🔹 1. Understand the Flow of Transactions 🔁 Identify all intercompany transactions — sales, loans, services, recharges, royalties, interest, etc. 📂 Ensure proper documentation: agreements, invoices, pricing terms. 🔹 2. Establish a Common Cut-off Date 📅 Both entities should record transactions within the same accounting period. Mismatched timing = reconciliation nightmare! 🔹 3. Currency Translation Rules 🌐 If the functional currencies differ: • Record in local currency in each entity. • Convert using agreed exchange rates (spot, average, month-end). • Reconcile both transaction value and FX differences. 📌 Example: Entity A (USD) invoices Entity B (INR) for $10,000. Entity B books ₹830,000 (@83/USD). Next month, if revalued at ₹84/USD — FX difference of ₹10,000 to be booked in P&L. 🔹 4. Align Balances & Descriptions ✅ Ensure that one entity’s receivable = the other’s payable 📄 Narrations should match (e.g., “IT Recharge Jan 2025”) 📍 Align invoice numbers and GL codes 🔹 5. Create a Reconciliation Template 📋 Include: • Entity Names • Invoice Numbers & Dates • Currency • Original Amount & Converted Amount • Variance (if any) • Remarks 🔹 6. Investigate & Resolve Differences 🕵️♀️ Common reasons for mismatches: • Missing invoices • Different FX rates • Cut-off mismatches • Rounding differences Resolve before month/year-end close. Tag responsible teams. Use trackers! 🔹 7. Document Everything 📑 Keep reconciliation files for each month — required for audit trail 📌 Management sign-off is a best practice ✅ ⸻ 💡 Pro Tip: Automate intercompany entries in group ERPs like SAP/Oracle/D365 and standardize FX policies to reduce reconciliation time by 50%! ⚙️📉 ⸻ 🎯 Intercompany reconciliation isn’t just about matching numbers — it’s about aligning process, timing, and communication across borders 🌐🤝 Drop your experiences or hacks below 👇 ⸻ #IntercompanyReconciliation #FinanceSimplified #AccountingProcesses #FinancialReporting #GroupConsolidation #ERP #FXAccounting #FunctionalCurrency #AuditReady #FinanceOperations #SharedServices #CACommunity #FinanceProfessionals #MultinationalAccounting #CorporateFinance #IFRS #Controllership #MonthEndClose #AccountingTips #Big4 #CFOInsights #LinkedInFinance

Accountants working with foreign currency transactions, this one’s for you. If your organization uses accounting software like QuickBooks and handles payments in foreign currencies, it’s important to ensure exchange gains or losses (realized and unrealized) are accurately recorded. A common issue arises when payments especially bulk payments covering multiple invoices are recorded without linking them to the original invoices. This can result in missed or incorrect exchange gain/loss calculations, which may surface during audits. Best Practice Always use the "Receive Payment"option in QuickBooks and apply payments directly to the appropriate invoice(s). This ensures exchange gains or losses are calculated automatically, eliminating the need for manual journal entries. But if the payment wasn’t linked and you need to post the exchange gain/loss manually: - Dr Bank - Cr Accounts Receivable -Cr Realized Exchange Gain (if gain) — or — - Dr Realized Exchange Loss(if loss) -Cr Accounts Receivable If you previously recorded the payment with a journal but forgot to post the exchange difference: Post an adjusting journal entry: Dr Accounts Receivable (to reverse the over/under recorded AR) Cr Realized Exchange Gain(if gain) — or — Dr Realized Exchange Loss Cr Accounts Receivable Being audit-ready means being detail-oriented. Linking invoices to payments properly not only ensures clean records but saves time during financial reviews. #FinanceProfessionals #AccountingBestPractices #ExchangeGains #ForeignCurrencyAccounting #QuickBooksTips #AuditReady #ReconciliationMatters #AccountingTips #ProfessionalAccountants #RealizedGain #UnrealizedLoss

The Bookkeeping mistake that costed an e-commerce seller $18,000 in one quarter (CURRENCY CONVERSION) Selling internationally can explode your revenue. But it can also destroy your profit margins if you handle multi-currency accounting wrong. Last month I audited books for an online retailer doing $450K across European markets. They thought they were crushing it with 40% margins. Reality check: After proper currency accounting, their actual margin was 12%. The hidden profit killer? Exchange rate fluctuations they weren't tracking properly. Here's what most international sellers get wrong: They treat all currencies like not real money and convert everything at random rates. One day they use Amazon's rate. Next week they use their bank's rate. Month-end they panic and guess at the differences. This creates phantom profits that don't exist and real losses they can't explain. The 6-step system that fixes currency chaos: 1.Pick one primary currency for all financial reporting and stick to it religiously 2.Track every transaction in its original currency before converting anything 3.Use consistent rate sources instead of whatever's convenient that day 4.Record conversion fees separately so you know what international sales really cost 5.Reconcile platform reports against bank statements weekly, not monthly 6.Revalue foreign currency balances at month-end to catch unrealized gains and losses Real example of how this works: EUR Sale: €100 at 1.10 rate = $110 revenue recorded Three days later settlement at 1.12 rate = $108 actually received after fees Without proper tracking: Missing $2 loss per transaction With 5,000 transactions monthly: $10,000 phantom profit vanishing The difference this makes is staggering. Instead of discovering surprise losses during tax season, you know your real margins daily. Instead of guessing at profitability by country, you can make data-driven pricing decisions. Instead of reconciliation nightmares, your books actually balance. Smart international sellers understand this truth: Currency management isn't about perfect predictions. It's about accurate tracking and consistent processes. When your multi-currency system works properly, you can price confidently, forecast accurately, and scale internationally without financial surprises. At Ottit, we help e-commerce businesses master international accounting and protect their profit margins from currency volatility. Ready to clean up your multi-currency mess and see your real international profitability? Book a strategy call through the link in my bio. What's your biggest challenge with international sales accounting?

Mirror Accounts - Part 1 If you are from BFSI or Payment domain, you must have heard this term called "Mirror Accounts" and If you are from payment investigation team you very frequently get to work with "Mirror Accounts". So let's understand the term, their types and usage. Mirror accounts are essentially copy of the account held by the corresponding bank (nostro account). They are important for reconciliation purposes, enabling both banks to keep their records synchronized. Mirror Accounts are used to track the balances and transactions between two banks, typically across countries or regions. They allow each bank involved in international transactions to keep a clear record of the money it holds on behalf of the other bank. Types of Mirror Accounts 1. Nostro Mirror Account : This is a mirror image of the Nostro Account maintained by the foreign bank at the domestic bank. It reflects the exact balance held by the domestic bank with the foreign bank, but it is maintained in the local currency. The purpose is to keep a local record of the transactions an led balance that the domestic bank has in its foreign account. For example : An Indian bank has a U.S. dollar account with a bank in the U.S., that account is called a nostro account. When the domestic bank makes or receives payments in that foreign currency, it adjusts the balance of this nostro account. To track and monitor transactions easily, banks maintain a nostro mirror account at their end. This account mirrors the exact balance and movements of funds in the foreign nostro account but is maintained in the domestic currency. 2. Vostro Mirror Account : This is a mirror image of the Vostro Account which a foreign bank holds with the domestic bank. It reflects the transactions and balances of the foreign bank’s holdings, maintained in local currency. It helps the domestic bank monitor the funds it holds on behalf of the foreign bank. For example : Bank B (UK-based) needs to hold an account in US dollars (USD) with Bank A (USA). Bank A creates a Vostro account for Bank B in USD. This allows Bank B to settle transactions in USD through Bank A, and Bank A manages this account on behalf of Bank B. To keep track of this Vostro account, Bank B creates a mirror account on its own ledger, denominated in GBP (British Pounds), reflecting the balance of the USD account held with Bank A. The mirror account shows how much money Bank B has in its USD account with Bank A but converted to GBP for its own records.