Reconciliation Account

Definition

• Reconciliation Accounts in SAP integrate sub-ledgers with the General Ledger, ensuring consistent financial data across sub-ledgers and the General Ledger

• Postings to reconciliation accounts cannot be manually done, as they are automatically generated based on transactions in sub-ledgers.

Type of Reconciliation Account

1.     Customer Reconciliation Account

•    The Customer Recon Account is linked to Accounts Receivable Accounts in the sub-ledger, allowing automatic updating of the G/L through the reconciliation account, such as when a customer purchases goods on credit.

2.     Vendor Reconciliation Account

•    The Vendor Recon Account is linked to Accounts Payable Accounts in the sub-ledger, allowing a company to update the G/L and receive goods on credit.

3.     Asset Reconciliation Account

•    The Asset Reconciliation Account links to Asset Accounting sub-ledger, Asset classes must have assigned reconciliation accounts for acquisition and depreciation.

Example scenario

• This ensures that any postings made in sub-ledger accounts, such as customer, vendor, or asset accounts, are automatically reflected in the corresponding reconciliation accounts, maintaining book balance.