Adding up 45,000 TL and 6,000 dollars and calling it a “balance” is the quietest mistake exporting companies make. Summing different currencies on a single line makes the number meaningless. This is exactly why the foreign-currency account statement exists: it runs each currency separately and shows the real debt as it is. In this article we cover what this statement is, why it is needed, and how it works correctly.
What is a foreign-currency account statement, and why is it needed?
An account statement is a chronological breakdown of all the receivable and payable movements with a customer or supplier. In companies that export and import, these movements do not stay in a single currency: one invoice may be in TL, one collection in dollars, one expense in euros. A foreign-currency account statement is the type of statement that runs each currency within itself, without mixing these movements together. Without it, the question “how much do we owe?” has no clear answer, because the sum of different currencies does not correspond to a real amount.
The 3 risks of mixing everything into one balance
Adding different currencies into a single running balance looks like a small shortcut; in reality it creates three serious problems:
- The real debt disappears. Adding 45,000 TL and 6,000 dollars and writing “51,000” produces a meaningless number that is neither TL nor dollars.
- The exchange-rate difference is hidden. When currencies are converted into a single amount and summed, it becomes unclear when the rate was applied; the figure misleads as it fluctuates.
- Reconciliation collapses. In reconciliation with the other party, the real debt is in the original currency; a mixed balance never brings the two sides to the same number.
How does a correct statement work?
A correct statement runs each currency like a separate sub-ledger. In Loggerise logistics ERP, the account statement keeps separate running balances for TL, dollars and euros; on each line it shows both the original currency amount and its TL equivalent at that day’s rate in separate columns. This way a TL debt does not seep into the dollars, and a dollar debt is not summed with euros. On the financial management side, the summary also comes out separately per currency: for each currency, the opening, debit, credit and closing amounts are visible at a glance.
This structure is not only an accounting order but also a source of operational confidence. When the sales team negotiates with a customer, they see the real debt in the correct currency; the finance team builds the collection plan in the correct currency. Instead of a single mixed figure, each currency’s own story is clear. This eliminates misunderstandings both in internal reporting and in communication with the other party, and ensures the team talks about the same number.
In which currency is reconciliation done?
What matters in reconciliation is the original currency. 5 TL and 1,000 euros are separate debts and are not netted off; because as the rate fluctuates the real debt does not change, only its TL equivalent does. For this reason, the foreign-currency account statement declares the real debt in the original currency and shows the TL equivalent only for information and risk tracking. For an exporter, this distinction is a critical detail that eliminates month-end surprises.
3 points to watch in practice
- Never distort the original amount: Keep each movement in the currency in which it was entered; show the TL equivalent in a separate column for reporting.
- Use the transaction-day rate: The TL equivalent must be calculated with the rate of the day the movement took place; an average rate is misleading.
- Reconcile in the currency: The reconciliation letter sent to the other party must declare each currency separately.
When these three principles are applied, the statement always answers the question “how much will I be paid?” in the correct currency; it does not leave it to an estimate or an average rate.
Frequently Asked Questions
What is the difference between a foreign-currency account statement and a normal account statement?
A normal statement assumes a single currency. A multi-currency statement, on the other hand, runs each currency separately and preserves the real balance of each one.
Does the statement calculate the exchange-rate difference?
The statement shows the real balance in the original currency; the TL equivalent is for information. Accounting for the exchange-rate difference falls within general accounting.
Is this necessary for a small company?
It is necessary for every company that exports or handles foreign-currency transactions. Current-account tracking is also possible for small teams with lightweight solutions such as Loggerise ERP.
Let your current accounts tell the truth
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