Understanding the Reconciliation Account in SAP

What Is Reconciliation Account In Sap

In SAP, a reconciliation account plays a crucial role in financial accounting. It serves as an intermediary between the general ledger and sub-ledgers, helping to ensure accurate and balanced financial reporting. This article will delve into the concept of reconciliation accounts in SAP, explaining their purpose, functionality, and how they are used within the system. Understanding reconciliation accounts is essential for effectively managing financial transactions and maintaining accurate records in SAP.

SAP Reconciliation Account Creation

When it comes to creating SAP reconciliation accounts, the process is quite similar to setting up other general ledger accounts. However, there are a few specific attributes that must be accurately configured. The central transaction code FS00 is utilized for the creation of reconciliation accounts.

In this tutorial, we will not walk through the entire account creation process, as a reconciliation account is created in much the same way as any other general ledger account. Instead, let’s examine account 160000 for AP (Accounts Payable) reconciliation. We will walk through the three main areas where a reconciliation account differs from other accounts.

To view a reconciliation account in SAP, you can either utilize the transaction code FS00 or follow the given menu path.

The first area that denotes that this is a reconciliation account is the control data in the “Type/Description” tab. Here, you should note that the account group “Recon.account ready for input” is selected. Also, all reconciliation accounts should be identified as balance sheet accounts:

Finally, click on “Create/bank/interest” tab and check the field status group. The field status group for all reconciliation accounts is G067:

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Understanding account reconciliation

Reconciliation is a process in accounting that involves comparing two sets of records to ensure the accuracy and agreement of the figures. It also serves to verify that the accounts in a general ledger are both consistent and complete. Reconciliation can be utilized for personal as well as business objectives.

1. Reconciliation is an accounting procedure.

2. It compares two sets of records.

3. The purpose is to check for correctness and agreement of figures.

4. It confirms consistency and completeness of accounts in a general ledger.

5. Reconciliation can be used for personal or business purposes

What is the Reconciliation Account Assignment in SAP?

To view a vendor in SAP, you can utilize the transaction code FK03 or follow this menu path.

Enter a valid company code and vendor number, select the “Accounting info” tick box and press enter. The reconciliation account 160000 examined earlier is assigned in the “Recon. account” field for this vendor:

As a result, whenever any transaction is recorded under vendor 36, the general ledger gets updated with an equal amount through reconciliation account 160000.

Distinguishing between reconciliation account and revenue account in SAP

Reconciliation Account is your subledger Account which is always reconciled online with the GL account. You assign reconciliation account for vendors and customers. you cannot post directly to a Reconciliation Account. On other hand, Revenue Account is normal GL Account wiht specific Account Group as ‘Revenue’.

Vendor Invoice Posting in SAP

Lastly, we will explore the process of updating a reconciliation account when an invoice is posted for a vendor.

To record a vendor invoice, you can utilize transaction code FB60 or access the corresponding option through the menu path provided.

Enter the vendor number that was previously reviewed (in this case, vendor 36) and input all the required information for posting an invoice.

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Now post the invoice and click “Document > Display” on the top far left of the toolbar to display the created document:

The screen displayed will show the vendor 36 being credited with an amount of 2000 BWP. To view the general ledger, click on the corresponding option.

The transaction mentioned above has made changes to the vendor account, specifically to the reconciliation account 160000.

Viewing the invoice document in the general ledger perspective.

As a result, reconciliation account 160000 received an additional credit of 2000 BWP. This means that whenever a transaction is posted to a sub ledger account, the reconciliation account will be automatically updated with the same amount in real time. To ensure accurate reconciliation with the sub ledger, SAP only allows the system to update the reconciliation account through the sub ledger. It is not permitted to directly post transactions to the SAP reconciliation account.

The purpose of the vendor reconciliation account in SAP

The purpose of having a separate reconciliation account for local vendors is to streamline the process of reconciling sub ledger data with the general ledger. As transactions occur in various sub ledgers related to these vendors (such as purchase orders or invoices), they are automatically posted to their respective reconciliation accounts. This allows for real-time updates on outstanding balances owed by or due to these vendors.

What is the name of the account for reconciliation?

Hence, GL account mapped to customer is called reconciliation account or recon account. Recon account cannot be directly posted. Recon account is automatically posted when posting to customer happens.

The purpose of utilizing a reconciliation account

Reconciliation is an accounting process that ensures that the actual amount of money spent matches the amount shown leaving an account at the end of a fiscal period. Individuals and businesses perform reconciliation at regular intervals to check for errors or fraudulent activity.

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Creating a reconciliation account in SAP: How can it be done?

To set up a reconciliation account in SAP, you can begin by creating a general ledger (G/L) account using transaction code FS00. This G/L account should be categorized under the “balance sheet” category and designated as a reconciliation account. Within the reconciliation account category, you will need to select the option for “accounts payable.” Once these settings are configured, save the changes along with any other necessary parameters related to your G/L accounts.

By following this process, you will be able to effectively post transactions to your vendor accounts. The creation of a reconciliation account allows for proper tracking and management of financial activities associated with vendors. It ensures that all relevant information is accurately recorded and maintained within SAP.

Having well-maintained vendor accounts enables businesses to easily monitor their financial obligations towards suppliers or service providers. It also facilitates efficient communication between different departments involved in procurement processes such as purchasing, receiving goods/services, and making payments.

Determining the reconciliation account in SAP

In SAP, the reconciliation account is a crucial component in financial accounting. It helps to ensure that all transactions are properly recorded and balanced. The reconciliation account acts as an intermediary between sub-ledgers and the general ledger, allowing for accurate tracking of financial data.

To set up the reconciliation account determination in SAP, you need to access the SPRO (SAP Project Reference Object) menu and navigate through various modules such as SD (Sales and Distribution), Basic Functions, Account Assignment/Costing. Within this menu, you can maintain the field catalog by adding the KSCHA field which represents a price condition type.

By following these steps in setting up reconciliation account determination in SAP, businesses can ensure accurate recording of financial transactions while maintaining proper balance between sub-ledgers and general ledger accounts