Reconcilation account

[Former Member]

Dear friends

What do you understand by reconcilation account

With regards

Sankalp singhai

[Former Member · Accepted solution]

Hi,

In accounting there are main three types of subledger account is there, like vendor, customer and Assest. For vendor, customer and asset seperater vendor master account, customer account and asset account will be there. These account not going to reflect in Balance sheet as vendor account. So these subledger accounts are mapped into Reconcillation account for the group of vendors or customers according to their type. So in balance sheet this will be comes under sundry creditors, sundry debtors.

So whenever payment made in advance ,what we call in SAP as down payment i.e., without booking any liability we have to pay money. so there is seperate type of mapping exist for the down payment. So when payment down payment made the entry for say vendor will be

Vendor alternative recon account - Dr - 111111

Bank account - Cr - 222222

After the bill received :

Expenses account - Dr - 333333

Vendor Reconcillation account - Cr - 444444

Clearing of down payment.

Vendor Reconcillation account - Dr - 444444

Vendor Alternative recon account - Cr - 111111

So after bills produced the alternative reconcillation account cleared against vendor reconcillation account.

Reward points if it helps.

Regards,

Harsh

[Former Member]

Reconsilation account used as a link between subledger& GL account.

Transation posted in Subledger automatically posted in the GL account using the Reconsilation Account.

ex: accounts payable, accounts receivable, meterial accounts, asset accounts.

Regards.

[Former Member]

Dear Sankalp,

The General Ledger records all G/L accounts. The Chart of Accounts is used to organize these accounts. The Income Statement and Balance Sheet are created from the General Ledger

Individual G/L reconciliation accounts are recorded in detail in the Subsidiary Ledgers and summarized in the General Ledger. Important subledgers are maintained for:

Accounts Recievable--Customer Accounts

Accounts Payable--Vendor Accounts

Asset Accounting--Asset Accounts

The balance of the G/L accounts is automatically updated when postings are made to a subledger.

The Purpose and Operation of the Reconciliation Account

The Reconciliation Account is managed as an ordinary account in the G/L component.

As in all G/L accounts there are two areas which contain master data:

A chart of accounts area

A company code specific area

The chart of accounts area consists of specifications that are necessary for functions across company codes. The company code-specific area contains data that may be defined differently in each company.

In all reconciliation account master records, line item display is deactiviated and a special entry is made to indicate that the G/L account is a reconciliation account

The required reconciliation account is entered in the master record of the customer account.

Hope this helps you.

Do award points if you found them useful.

Regards,

Rakesh

[Lakshmipathi]

Dear sankalp

The reconciliation account in G/L accounting is the account which is updated parallel to the subledger account for normal postings (for example, invoice or payment).

For special postings (for example, down payment or bill of exchange), this account is replaced by another account (for example, 'down payments received' instead of 'receivables').

The replacement takes place due to the special G/L indicator which you must specify for these types of postings.

Thanks

G. Lakshmipathi

[Former Member]

Importance of Reconcillation Account:

From SD view point, in billing document an accounting entry is created, which in generic term will be as under:

Customer A/c _____ Dr

To Sales a/c ______ Cr

To Taxes _________ Cr

The Reconcilation A/c has its role in Customer A/c & when yopu doubleclick on the G/L account against Customer, it reflects the reconcilation A/C.

Regards,

Rajesh Banka