This step-by-step guide helps you set up a Journal tolerance to simplify your work with journals.
Konsolidator can automatically post and eliminate minor journal differences, like exchange rate adjustments, when you enable the "Journal Tolerance" feature. When enabled, you do not have to manually go through all journals to eliminate minor differences under the agreed tolerance level. For example, small intercompany deviations will be solved.
BEFORE YOU START:
Agree upon a defined tolerance level before you start. The tolerance amount you define will affect system journals across the entire group.
Journal tolerance only works on all system-generated journals, including elimination type journals. If you have created your own elimination journals, these will not be affected by the Journal tolerance.
How to change your Journal Tolerance
Step 1: Where you find "Tolerance"
In your Konsolidator account, tolerance is part of "Journals". You can always access this by:
- Navigating to journals in the left-side panel
- Selecting "Tolerance" in the dropdown
Step 2: fill out the information
When you have decided upon your tolerance level, fill out the required information on the "Journal Tolerance" page and click ‘save’.
- Click on the enable button at the top to be able to edit the fields
- Tolerance Amount: Write the amount you maximum want to accept as a difference in journals. The amount should be in the ultimate parent’s currency.
- Profit/loss Account: Select the account in the dropdown list on which you want the adjustments to occur, for example, “Gain/loss on foreign exchange”.
- Balance Sheet account: Select an account in the dropdown list on which you want the adjustments to occur, for example, “Other current liabilities”.
- Click on the save button.
Once you enable the feature in Konsolidator, variances below your tolerance level will automatically be posted on separate accounts in relevant journals.
Create a dedicated account
If you want to have an account only created for the minor adjustments in the journals. You can create a dedicated account for both profit/loss and Balance sheet. You can always do this later.
Tolerance level in subgroups to match ultimate parent company
The amount you set as tolerance is based on the local currency of the ultimate parent company and affects all entities within the group. For subsidiaries in other currencies, the tolerance will be recalculated to their currencies using the exchange rates in Konsolidator.