Overview
Auto Journals in GATHER.nexus automatically create consolidation entries to eliminate intercompany balances, saving time and improving accuracy. They also support optional foreign exchange (FX) elimination logic via Auto FX2 journals, ensuring clean reporting when entities operate in different currencies.
Part 1: Setting Up Auto Journals
Step 1: Access Auto Journals
Go to Group Financial Reporting.
Open the Auto Journals tab.
Click Setup New Auto Journal.
Step 2: Configure Journal Basics
Narration – Add a clear label (e.g., “IC Sales Elimination”).
Group – Select the reporting group.
Start Period – Choose the starting period (MM-YYYY).
Reference Number – Auto-generated but editable.
Step 3: Draft Mode (Optional)
Enable Draft Mode if you want to test entries before publishing.
Draft entries won’t appear in reports until activated.
Step 4: First Company Setup
Select the company.
Choose the relevant intercompany account.
(Optional) Add the counterparty and a description.
Step 5: Second Company Setup
Repeat for the other entity.
Ensure intercompany accounts (and counterparties, if used) match correctly.
Step 6: Enable Auto FX Journals (Optional)
Tick Add Auto FX Journals if entities use multiple currencies.
Leave unticked if all entities report in the same currency.
Step 7: Create Journals
Click Start Creating.
GATHER generates elimination journals automatically based on your setup.
Step 8: Review Generated Journals
You’ll see:
Date – Journal creation date.
Narration – Description you provided.
Status – Draft or Published.
Amount – Value eliminated.
Actions – Edit, track history, or deactivate.
Managing Auto Journals
Edit – Change narration or values.
History – Track modifications.
Inactive – Temporarily disable, then reactivate anytime.
Part 2: Auto FX2 Logic
Why Auto FX2 is Needed
When intercompany transactions occur across entities with different base currencies, timing differences in exchange rates can create imbalances.
Each entity records transactions in its local currency using the exchange rate on the transaction date.
At consolidation, those same amounts are retranslated into the Group Reporting Currency using average (P&L) or closing (Balance Sheet) rates.
This can leave small differences between sales and costs, overstating or understating Profit After Tax (PAT).
Without adjustment, these FX mismatches would:
Distort consolidated P&L by leaving unexplained gains/losses in PAT.
Misstate Current Year Earnings in the Balance Sheet.
How Auto FX2 Works – Practical Example
UK entity invoices £1,000.
US entity records cost as $1,300 at transaction date rate (1.30).
At consolidation, average rate is 1.25 → $1,300 converts to £1,040.
Imbalance = £40.
Auto FX2 posts automatically:
Moves £40 out of Profit After Tax → into FX Differences (2) in the Consolidated P&L.
Posts £40 into FX Differences in Reserves (2) in the Consolidated Balance Sheet.
Keeps Current Year Earnings aligned with the P&L.
Where Auto FX2 is posted: Auto FX2 journals appear in Working Papers, alongside other consolidation journals, ensuring they are visible for review, drill-down, and audit.
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