Multi Currency Bank Reconciliation: A Step-by-Step Method

A company invoicing in three or four currencies often reconciles its bank accounts the way it would reconcile a single local account: add every balance up, convert everything to one currency, and compare the total against the general ledger. The total almost never matches on the first pass, because each bank account has its own statement, its own clearing calendar, and its own currency, and merging them into one comparison hides the exact differences the reconciliation is supposed to surface.

In Soulbit Academy we walk through the classic bank reconciliation process for a company holding accounts in several currencies: one statement per account, items in transit, correspondent bank fees that arrive net of charges, and the foreign exchange gain or loss, realized and unrealized, with the official rate that applies in Colombia and in Mexico. If part of your revenue also arrives in stablecoin, the method for reconciling that on-chain balance is different, and we cover it separately in reconciling stablecoin payments in accounting.

What multi currency bank reconciliation actually means

Multi currency bank reconciliation is matching each bank's statement against the ledger for that same account, without converting anything to a single currency until the very last step. A company with a dollar account and a euro account runs two parallel reconciliations, each in its own currency, and only converts both balances once each one is closed on its own.

Nortec Supply, a LATAM distributor with clients billed in dollars, euros and pounds, keeps a dollar account, a euro account and a peso account for local costs. At month end, its controller reconciles the dollar account against its own statement first, then the euro account against its own statement, and only then converts each closing balance to the company's functional currency for the consolidated balance sheet.

Why isn't reconciling one converted total enough?

Because an error can sit inside either currency, and a converted total hides it. If the dollar account has an unrecorded fee and the euro account has an outstanding check, adding both converted balances can coincidentally land close to the expected figure without either underlying item ever being corrected. Reconciling each account in its own currency, before converting, forces every difference to surface where it actually happened.

One statement per account and per currency: the first pass

The first step of a multi currency reconciliation is pulling one bank statement per account, never a consolidated report that blends currencies together. A company running a USD account for US clients and a GBP account for a UK client downloads two separate statements each month and matches each one against its own bank ledger.

The working order is the same for every account, regardless of currency: confirm the statement's opening balance matches last month's closing reconciled balance, list statement items missing from the ledger, list ledger items missing from the statement, and explain every difference until both balances agree in that same currency. Only after both reconciliations close separately does the foreign currency balance get converted to the functional currency, at the official rate for the closing date.

A company running three or four accounts in different currencies multiplies this work rather than simplifying it by grouping accounts together. The more accounts and currencies involved, the more discipline it takes to keep each statement, ledger, and exchange rate as separate pieces until the last step.

Items in transit in a multi currency reconciliation

An item in transit is a movement already recorded in the company's ledger that has not yet appeared on the bank statement, and in a foreign currency account this gap tends to run longer than in a domestic account: an international wire can take one to five business days to clear depending on which correspondent banks handle it, against hours for a domestic transfer.

Nortec Supply wires 8,500 dollars to a supplier in Asia on the 28th of the month and records the outflow that same day in the ledger, at that day's rate. The bank statement, however, does not show the wire until the 2nd of the following month, once the correspondent bank finishes processing it. During those days, that outflow is an item in transit: it sits in the ledger, not yet on the statement, and it should be flagged as such on the working paper, never forced into the balance ahead of time.

A payment from an overseas client generates the same kind of item in the other direction. If the client reports paying on the 30th but the bank only credits the deposit on the 3rd, those three days are an incoming item in transit, and the actual clearing date is what later determines which exchange rate applies to that receipt.

Correspondent bank fees: why the deposit arrives net

An international wire almost never arrives for the exact amount the payer sent, because correspondent banks deduct their fee before crediting the recipient. Nortec Supply invoices a US client for 10,000 dollars, but only 9,965 dollars land in the account: the correspondent bank deducted 35 dollars in fees without the statement showing that charge line by line, a common feature of the correspondent banking chain.

Recording only the net amount that arrives is the most common mistake in this part of the process. The correct entry recognizes the full 10,000 dollar receivable against the customer, and separates the 35 dollars as a financial expense. If the controller only books the 9,965 dollars actually received, the customer's receivable stays out of balance by exactly the fee amount, and that gap reappears month after month until someone investigates it.

When the statement does not break the fee out, it helps to request the full SWIFT confirmation, which usually shows the charges applied by each intermediary bank. Cost varies with the route and banks involved; a public reference is in our note on how much a SWIFT transfer costs.

Reconciliation element	Single currency account	Multiple accounts, multiple currencies
Statements to match	One per period	One per account and per currency, never consolidated
Items in transit	Hours to one business day, typical of domestic transfers	One to five business days, depending on correspondent banks
Bank fees	Usually itemized on the statement	Deducted by the correspondent before crediting; arrives net
Exchange rate applied	Not applicable	Official rate for the date of each movement, not one monthly average
FX gain or loss	Does not exist	Arises on collection, payment, or conversion, and again at each period close
Recommended frequency	Monthly	Monthly per account, weekly if international wire volume is high

Realized and unrealized FX gain or loss: what it is and how to post it

An FX gain or loss is the difference between the exchange rate a company used to record a foreign currency movement and the rate in effect when that movement is collected, paid, or revalued. There are two kinds, and mixing them up is the most common reason a monthly close cannot explain its own adjustments.

A realized FX gain or loss shows up the moment the money actually moves: the company collects the dollars, pays them out, or converts them, comparing the rate of that operation against the rate used when the movement was first recorded. Nortec Supply recorded a 10,000 dollar receivable at a given rate on the invoice date; if it converts those dollars 20 days later at a different rate, the difference is a realized FX gain or loss, and it stays fixed.

Does an FX gain or loss always hit the period's result?

The realized one does, in the period the collection, payment, or conversion happens. The unrealized one also hits the accounting result of the closing period, even though the cash never moved, because under IFRS monetary items denominated in foreign currency get restated at the closing rate on every balance sheet date. The International Accounting Standards Board sets this rule in IAS 21, on the effects of changes in foreign exchange rates, requiring that periodic restatement to post as an unrealized FX gain or loss, distinct from the one arising when the item is actually settled.

Nortec Supply still holds 5,000 dollars at the close of March that it has not yet used. If the closing rate for March differs from the one that balance carried at the close of February, the difference posts as unrealized: it affects that month's result, but it gets adjusted again next month, since the balance is still sitting in dollars, uncollected and unconverted. That unrealized difference can reverse in whole or in part later, depending on which way the rate moves.

Which official rate to use: Colombia's TRM and Mexico's DOF rate

The official rate that applies to a multi currency reconciliation is not chosen by the company's finance team: in Colombia it is the TRM, and in Mexico it is the rate Banco de México publishes in the Diario Oficial de la Federación. Using a market rate from an FX provider instead, without documenting the criterion, complicates supporting the close in front of an auditor.

In Colombia, the TRM is the weighted average of dollar purchase and sale operations executed by foreign exchange market intermediaries, calculated and certified each business day by the Superintendencia Financiera de Colombia, under the framework the Banco de la República's board sets in article 40 of Resolución Externa 1 of 2018. We cover in detail who certifies this rate and which one applies at each point of the accounting cycle in Colombia's TRM: which exchange rate to use for accounting.

In Mexico, the reference for settling foreign currency obligations payable inside the country is the exchange rate Banco de México publishes in the Diario Oficial de la Federación on the banking business day immediately following the date it is determined, under the rules Banco de México issues for determining the exchange rate. The accounting treatment of that conversion, for financial reporting purposes, follows Mexico's financial reporting standard on foreign currency translation, whose text is not freely available to the public: a company should confirm the version in force with its auditor before setting its exchange rate policy.

	Colombia	Mexico
Official rate	TRM (tasa representativa del mercado)	Exchange rate for settling obligations
Who certifies or publishes it	Superintendencia Financiera de Colombia	Banco de México
Where it is published	Superintendencia Financiera's TRM certificate	Diario Oficial de la Federación
Frequency	Every business day	Every banking business day
Legal basis	Resolución Externa 1 of 2018, Banco de la República's board	Banco de México's rules on determining the exchange rate
Typical accounting use	Revenue recognition, monthly close, FX gain or loss	Converting foreign currency obligations, monthly close

What Soulbit solves today, and what still belongs to the accountant

Soulbit V1 holds a company's balance in several currencies at once, USD, EUR and GBP alongside USDC and USDT, and provides a full, exportable history of every movement. That reduces the number of separate bank statements a controller has to chase when the company operates across currencies, because part of the foreign currency balance sits in one place instead of scattered across accounts at different correspondent banks.

What Soulbit does not do is connect automatically to a company's ERP or accounting software: there is no API or SDK in the V1 to sync entries in real time. Exporting the movement history is a manual step, and matching that export against the general ledger, flagging items in transit, and posting the FX gain or loss at the correct official rate remains, in full, the accountant's job. Soulbit also does not offer cards, yield, or a native mobile app available today.

So what actually changes in the accountant's day-to-day work?

Fewer traditional bank accounts to reconcile separately, not less reconciliation work overall. The accountant still sets the exchange rate policy, still flags every item in transit, and still posts the realized and unrealized FX gain or loss at the correct official rate. To put that policy in writing before the first multi currency close, start from a treasury policy template for SMBs, and to project how those currencies move through cash, use a cash flow forecast in foreign currency. A company also collecting from clients in Mexico can review receiving international payments in USDC in Mexico.