Settlement FX and Fees: Explain the Net Bank Amount

State each currency and rate direction

Label transaction currency, internal-ledger currency and settlement currency independently. A customer payment can be collected in one currency while the operator's liability and bank account use others. Record which amount is converted, the rate's direction, its timestamp or batch basis and any separately disclosed conversion charge.

A rate of 0.92 EUR per USD means USD 1,000 converts to EUR 920 before other items. Its inverse is a different numerical value. Preserve the provider's quoted rate and the actual converted amount, since rounding or a contractual spread may prevent a rounded displayed rate from reproducing every minor unit.

Build a signed bridge in settlement currency

Start with converted eligible receipts and add or subtract each documented component once. Processing fees, scheme fees, refunds, chargebacks, new reserve withholding and reserve releases should retain their own classification. Adyen's settlement report exposes gross/net currency, exchange-rate, fee and journal-type fields for this purpose.

A reserve movement is not automatically a processing expense. A refund from a prior batch is not a reduction in today's sales count. Keep the business meaning and reference of each row even when all rows ultimately contribute to one bank payout. Use the report's signs consistently and test negative adjustments.

Control rounding and unexplained differences

Specify whether the provider rounds each transaction, each converted fee or the batch total. Decimal arithmetic supports explicit rounding rules, but a software default is not a commercial agreement. Store calculation precision separately from display precision and preserve a residual rather than distributing it silently across customers.

If the bank amount differs, first check the payout currency, bank charges, cut-off, returns and missing report lines. Recomputing using a public market rate can be a diagnostic comparison, but it does not replace the contracted settlement rate. Record which difference is an actual fee, which is timing and which still lacks evidence. Close only when the cash bridge and related liability records are both explainable.

Worked example: USD receipts, EUR settlement

Assume fictional gross receipts of USD 10,000 and USD 200 of fees converted at an explicitly assumed 0.92 EUR per USD. Gross EUR is 9,200 and fees are EUR 184. Subtract a EUR 460 reserve, add a EUR 92 reserve release and subtract a prior refund of EUR 276. Expected bank receipt is EUR 8,372. The implied difference from gross is not entirely a fee: it includes reserve timing and a separate refund.