One of the main reasons cross-border intercompany loans become out of balance is due to changes in the foreign exchange rate between the two currencies. Balancer makes it simple to spot and add an adjustment for this.
Set your Account Mappings
Balancer can create a manual journal in the borrower's Xero file to add the necessary adjustment to the intercompany loan account.
Before it can do that, it needs to know where to post the other side of the journal. Normally, this will be a 'Realised Foreign Exchange Gains' account code.
You can set this in the Settings > Account Mapping page:
System Accounts
When you choose your account, you may see a message such as the one above warning you that this is a so-called 'System Account'. Many of the default accounts in Xero are System Accounts. Xero does not allow third parties to create transactions in these accounts through the API. There are two workarounds possible:
Create a new account for Realised Currency Gains. This may mean however that the default reports in Xero no longer show the correct figures since they will include the System Account by default.
Edit in Xero. Mayday can still post FX Adjustment journals as "Draft" journals. When this is the case, Mayday will take you straight to the journal, where you will need to fill in the account code for the Realised Currency Gains line and approve the journal.
Posting
Once you've set up your account mappings, you can add an FX Adjustment from either the Balancer dashboard or from the Transaction Details page.
Clicking this will bring up a preview of the posting so you can confirm.
The amount of the FX adjustment will be equal to the discrepancy between the two loans at that point in time. So before posting the adjustment ensure you have reviewed the loan, resolved any one-sided postings and posted any interest (if applicable).
Once you're happy, click 'Post to Xero', and the adjustment will be posted.
If you wish to post an FX Adjustment for anything other than the previous month, you can change the date on the dashboard using the selector at the top of the page:
