Solutions from SAP SAP Business One 8.8
PUBLIC How to Work with Internal and External Reconciliations Solutions from SAP SAP Business One 8.8 February 2010 English SAP Business One 8.8 How to Work with Internal and External Reconciliations Contents How to Work with Internal and External Reconciliations ............................................................................ 4 Introduction .................................................................................................................................................... 4 What Is an Internal Reconciliation? ............................................................................................................ 4 What Is an External Reconciliation?........................................................................................................... 4 When to Perform a Reconciliation Manually, Automatically, or Semiautomatically ................................... 5 Preparing to Perform Internal and External Reconciliations ...................................................................... 6 Preparing to Perform Automatic Reconciliations ........................................................................................... 6 Defining Automatic Reconciliation Difference Account .............................................................................. 6 Preparing to Perform Internal Reconciliations with Exchange-Rate Differences........................................... 7 Defining Gain and Loss Accounts for Realized Exchange-Rate Differences ............................................ 7 Preparing to Perform Internal Reconciliations with Underpayment or Overpayment Amounts ..................... 8 Defining Underpayment and Overpayment Accounts ................................................................................ 8 Specifying Maximum Underpayment and Overpayments Amounts Allowed ............................................. 9 Working with Internal Reconciliations ........................................................................................................ 10 Manually Performing Internal Reconciliations .............................................................................................. 10 Manually Reconciling Business Partner Transactions ............................................................................. 10 Manually Reconciling Business Partner Transactions with Cash Discount ............................................. 13 Manually Reconciling Transactions Across Multiple Business Partners .................................................. 14 Manually Reconciling G/L Accounts ......................................................................................................... 16 Creating Adjustments ............................................................................................................................... 19 Automatically Performing Internal Reconciliations ....................................................................................... 20 Semiautomatically Performing Internal Reconciliations ............................................................................... 22 Managing Previous Internal Reconciliations ................................................................................................ 27 Viewing Internal Reconciliation History .................................................................................................... 27 Canceling Previous Internal Reconciliations ............................................................................................ 31 Viewing Applied Transactions for a Specific Transaction ........................................................................ 31 Printing Internal Reconciliations ................................................................................................................... 33 Printing Reconciled and Unreconciled Transactions for Specific Business Partners or G/L Accounts ... 33 Printing Previous Internal Reconciliations ................................................................................................ 34 Handling Exchange-Rate Differences, Underpayment and Overpayment Amounts, Withholding Tax, and Deferred Tax When Performing Internal Reconciliations ............................................................................. 34 Handling Exchange-Rate Differences ...................................................................................................... 34 Handling Underpayment and Overpayment Amounts.............................................................................. 35 Handling Withholding Tax ........................................................................................................................ 36 Handling Deferred Tax ............................................................................................................................. 37 Working with External Reconciliations ....................................................................................................... 38 Working with External Reconciliations When Using the Bank Statement Processing Functionality ........... 38 Recording Transactions from External Statements ..................................................................................... 39 Automatically Creating Incoming Payments to Reconcile Bank Statements ........................................... 40 Manually Performing External Reconciliations ............................................................................................ 41 Automatically Performing External Reconciliations ..................................................................................... 44 Semiautomatically Performing External Reconciliations .............................................................................. 46 Managing Previous External Reconciliations ............................................................................................... 49 Viewing External Reconciliation History ................................................................................................... 49 Canceling Previous External Reconciliations ........................................................................................... 51 Re-creating Previous External Reconciliations ........................................................................................ 52 © SAP AG 2010 2 SAP Business One 8.8 How to Work with Internal and External Reconciliations Checking and Restoring Previous External Reconciliations .................................................................... 52 Printing External Reconciliations ................................................................................................................. 54 Printing Reconciled and Unreconciled Transactions for Specific Business Partners or G/L Accounts ... 54 Printing Previous External Reconciliations ............................................................................................... 55 Importing External Bank Statement: Israel and Panama ............................................................................. 56 Manually Reconciling Bank Statements: ANZ, BR, CA, CN, CY, IN, JP, KO, SG, UK, US, and ZA ........... 57 Creating Adjustments: ANZ, BR, CA, CN, CY, IN, JP, KO, SG, UK, US, and ZA ................................... 61 Examples for Performing Internal and External Reconciliations ............................................................. 63 Performing Partial Manual Reconciliation for Business Partner Transactions ............................................ 63 Performing Manual Reconciliation for Business Partner Transactions Using Cash Discount ..................... 63 Performing Manual Reconciliation Across Multiple Business Partners ....................................................... 64 Performing Manual Reconciliation for G/L Accounts Using an Adjustment ................................................. 65 Performing Semiautomatic Internal or External Reconciliations .................................................................. 66 Canceling Previous Internal Reconciliation.................................................................................................. 67 Performing Manual Reconciliation for External Bank Statements ............................................................... 69 Performing Manual Reconciliation for External Bank Statements: ANZ, BR, CA, CN, CY, IN, JP, KO, SG, UK, US, and ZA ............................................................................................................................................ 69 Authorizations ................................................................................................................................................ 71 Database Tables Reference .......................................................................................................................... 71 Appendix: Rank Calculation in Reconciliation Recommendations ......................................................... 72 Copyrights, Trademarks, and Disclaimers.................................................................................................. 74 © SAP AG 2010 3 SAP Business One 8.8 How to Work with Internal and External Reconciliations How to Work with Internal and External Reconciliations Introduction SAP Business One lets you match and clear transactions for business partners and G/L accounts (internal reconciliation) as well as for external account statements (external reconciliation). You can choose to reconcile accounts manually, automatically, or manually based recommendations from SAP Business One (semiautomatically). In addition, you can view the reconciliation history, print reconciled and unreconciled transactions, and, if necessary, cancel previous reconciliations. What Is an Internal Reconciliation? Matching and clearing transactions for business partners or for G/L accounts is part of the bookkeeping process. The internal reconciliation function in SAP Business One lets you match and clear transactions that remain open for a business partner in the application. You can perform either a partial or full reconciliation for a specific business partner or for multiple business partners. Most of the time, internal reconciliations take place automatically when you create incoming or outgoing payments linked to invoices. In this case, SAP Business One automatically reconciles payments with the linked invoices. Stand-alone transactions, such as payment on account, remain open since SAP Business One cannot automatically match such a payment to an open invoice. You make the decision about which invoice the payment should be applied to. With regard to reconciling G/L accounts, during some business processes, related debit and credit transactions are posted to the same G/L account. The business process is complete only when the account has matching debit and credit postings. You do not need to perform an internal reconciliation for every account that has debit and credit postings. You can use the internal reconciliation function as an internal control tool to identify incomplete, incorrect, or missing postings in your internal G/L accounts and in your business processes. For example, you would usually reconcile bank clearing, deferred tax, and allocation accounts. NOTE Internal reconciliations do not change the value of the reconciled accounts. When the account currency is the local currency or all currencies, internal reconciliations for business partners and for G/L accounts are always done in the local currency. When you reconcile a G/L account that is set as foreign currency, a journal entry is posted if an exchange-rate gain or loss occurs. What Is an External Reconciliation? External reconciliation is the comparison of open transactions within SAP Business One with an external account statement. Most commonly this is a bank statement. However, it could be a business partner’s account statement containing a list of transactions that your customer sends to you as its vendor, for example. For external bank statement reconciliations, SAP Business One supports three different processes, each of which is relevant for different localizations: • Recording transactions from bank statements using the Process External Bank Statement window and then reconciling the transactions using the reconciliation function. This process is relevant for all localizations. For more information, see Manually Performing External Reconciliations, Automatically Performing External Reconciliations, and Semiautomatically Performing External Reconciliations. • Verifying the transactions recorded in SAP Business One with the balance received from the bank or other external source and creating adjustments, if required, using the manual reconciliation function. This process is relevant for the following localizations: Australia, Brazil, Canada, China, Cyprus, India, Japan, Korea, New Zealand, Singapore, South Africa, United Kingdom, and United States. For more information, see Manually Reconciling Bank Statements: AU, BR, CA, CN, CY, IN, JP, KO, SG, UK, US, and ZA. • Recording and reconciling bank statements using the bank statement processing function. Bank statement processing is supported for the following localizations: Austria, Belgium, Brazil, China, © SAP AG 2010 4 SAP Business One 8.8 How to Work with Internal and External Reconciliations Cyprus, Czech Republic, Denmark, Finland, France, Germany, Hungary, India, Italy, Japan, Korea, Netherlands, Norway, Poland, Russia, Singapore, Slovakia, Spain, Sweden, Switzerland, and United Kingdom. For more information, see Working with External Reconciliations When Using the Bank Statement Processing Functionality. For more information about external reconciliations in bank statement processing, see the online help for SAP Business One and How to Use Bank Statement Processing in Release 2007 in the documentation area of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. When to Perform a Reconciliation Manually, Automatically, or Semiautomatically The following table describes when you should use each reconciliation type: Type Used to Reconcile Manual A small number of transactions, cases where partial reconciliations are required, or transactions posted to more than one business partner or G/L account. Automatic A large number of transactions or a range of business partners or G/L accounts, based on user-defined parameters and priorities. NOTE Semiautomatic © SAP AG 2010 When you perform an automatic reconciliation for a range of business partners or G/L accounts, the reconciliation is done separately for each business partner or G/L account successively and not between transactions posted to different business partners or accounts. When you perform an automatic reconciliation, SAP Business One fully reconciles the transactions. If you allow automatic reconciliations with differences, SAP Business One posts any differences to the automatic reconciliation difference account. A number of transactions manually, based on recommendations provided by SAP Business One. 5 SAP Business One 8.8 How to Work with Internal and External Reconciliations Preparing to Perform Internal and External Reconciliations Preparing to Perform Automatic Reconciliations You can perform automatic internal and external reconciliations of transactions with nonidentical amounts. To allow automatic reconciliations with differences, you must first define the automatic reconciliation difference account. Then, when you perform the automatic reconciliation, you specify the maximum amount of the difference that should be allowed. During automatic reconciliation, SAP Business One fully reconciles pairs of transactions. If a difference is found, and it less than or equal to the maximum difference amount you specified, it is posted to the automatic reconciliation difference account. For more information, see Automatically Performing Internal Reconciliations and Automatically Performing External Reconciliations. Defining Automatic Reconciliation Difference Account 1. From the SAP Business One Main Menu, choose Administration → Setup → Financials → G/L Account Determination → General tab. 2. In the Automatic Reconciliation Diff. field, specify an existing G/L account or define a new account. 3. To save your changes, choose the Update button. © SAP AG 2010 6 SAP Business One 8.8 How to Work with Internal and External Reconciliations Preparing to Perform Internal Reconciliations with ExchangeRate Differences When performing manual, automatic, or semiautomatic internal reconciliations for G/L accounts and for business partners that are set with a foreign currency, a journal entry is posted if an exchange-rate gain or loss occurs. To enable exchange-rate journal entries to be posted, you need to define both a gain account and a loss account for the realized exchange-rate difference. Those two accounts need to be defined in three different places, to handle exchange-rate differences for sales (relevant for customers), for purchasing (relevant for vendors), and for G/L accounts. Defining Gain and Loss Accounts for Realized Exchange-Rate Differences 1. From the SAP Business One Main Menu, choose Administration → Setup → Financials → G/L Account Determination. 2. To enable exchange-rate journal entries to be posted for: Customers: choose the General subtab on the Sales tab. Vendors: choose the General subtab on the Purchasing tab. G/L accounts: choose the General tab. 3. In the Realized Exchange Diff. Gain and in the Realized Exchange Diff. Loss fields, specify existing G/L accounts or define new accounts. Perform this action for customers, vendors, and G/L accounts. 4. To save your changes, choose the Update button. © SAP AG 2010 7 SAP Business One 8.8 How to Work with Internal and External Reconciliations Preparing to Perform Internal Reconciliations with Underpayment or Overpayment Amounts When you perform manual internal reconciliations involving incoming or outgoing payments in local currency, you can use functionality for underpayments and overpayments. Once the reconciliation is complete, SAP Business One posts the amount of the underpayment or overpayment to the respective account. To use underpayments and overpayments, specify the respective accounts and the maximum underpayment and overpayment amount allowed. Defining Underpayment and Overpayment Accounts 1. From the SAP Business One Main Menu, choose Administration → Setup → Financials → G/L Account Determination. 2. To enable underpayment or overpayment journal entries to be posted for: Incoming payments: choose the General subtab on the Sales tab. Outgoing payments: choose the General subtab on the Purchasing tab. 3. In the General subtab on the Sales tab, in the Overpayment A/R Account and in the Underpayment A/R Account fields, specify existing G/L accounts or define new accounts. In the General subtab on the Purchasing tab, in the Overpayment A/P Account and in the Underpayment A/P Account fields, specify existing G/L accounts or define new accounts. 4. To save your changes, choose the Update button. © SAP AG 2010 8 SAP Business One 8.8 How to Work with Internal and External Reconciliations Specifying Maximum Underpayment and Overpayments Amounts Allowed 1. From the SAP Business One Main Menu, choose Administration → System Initialization → Document Settings → Per Document tab. 2. From the Document dropdown list, choose Incoming Payment or Outgoing Payment, and in the Under/Overpayment Amt Allowed field specify the maximum amount allowed for an underpayment or overpayment. Repeat this step for the other payment type. 3. To save your changes, choose the Update button. © SAP AG 2010 9 SAP Business One 8.8 How to Work with Internal and External Reconciliations Working with Internal Reconciliations You can perform internal reconciliations manually, automatically, or semiautomatically for business partner transactions and for G/L accounts. You can perform partial reconciliations, create adjustments, and print reconciliations when you manually perform internal reconciliations. When needed, you can also cancel previous reconciliations. If you use cash discounts and want to include them in your reconciliations, you need to use the manual internal reconciliation type. You cannot use cash discounts for automatic internal reconciliations, semiautomatic internal reconciliations, and manual reconciliation across multiple business partners. Manually Performing Internal Reconciliations You can perform either partial or full manual reconciliations for specific business partner transactions, for transactions across multiple business partners, and for G/L accounts. When you manually reconcile transactions for a business partner, you can use cash discounts. Manually Reconciling Business Partner Transactions When you use the manual internal reconciliation function, SAP Business One displays all the open invoices, payments, credit memos, and journal entries associated with the particular business partner. As you select matching debits and credits, SAP Business One alters the display of the reconciliation difference – the difference between the total debits and credits selected. Note that the reconciliation process is the same for both customers and vendors. When the reconciliation difference is zero, you can complete the reconciliation. SAP Business One clears the transactions, and they are no longer displayed as open transactions. You can also partially reconcile transactions by changing the amount to reconcile. Procedure 1. To access the Internal Reconciliation window in which you can manually reconcile the selected business partner transactions, use one of the following methods: Navigate from the SAP Business One Main Menu. i. From the SAP Business One Main Menu, choose Business Partners → Internal Reconciliations → Reconciliation. The BP Internal Reconciliation - Selection Criteria window appears. ii. Select the Manual radio button; in the Business Partner field specify the business partner you want to reconcile. If you want to reconcile transactions for two or more business partners, select the Multiple BPs checkbox and specify the business partners you want to reconcile. For more information, see Manually Reconciling Transactions Across Multiple Business Partners. © SAP AG 2010 10 SAP Business One 8.8 How to Work with Internal and External Reconciliations iii. Choose the Reconcile button. Navigate from the business partner account balance. i. ii. From the SAP Business One Main Menu, choose Business Partners → Business Partner Master Data. next to the Account Balance field. Browse to the relevant business partner and click The Account Balance - XXX, YYY window appears, where XXX is the business partner code and YYY is the business partner name. iii. Choose the Internal Reconciliation button. The Internal Reconciliation window appears for the selected business partner. SAP Business One displays all the open transactions for the business partner up to the reconciliation date, which by default is the system date. Open transactions include: Invoices Payments Credit memos Manual journal entries 2. Specify the reconciliation date. © SAP AG 2010 11 SAP Business One 8.8 How to Work with Internal and External Reconciliations Only the open transactions with a posting date prior to the reconciliation date are displayed. 3. Review the following information and select the transactions you want to reconcile. As you select a transaction, SAP Business One automatically recalculates the reconciliation difference. Field/Button Description/Activity General Area BP Code of the business partner. Appears only when a single business partner was specified in the BP Internal Reconciliation - Selection Criteria window. NOTE You can select a different business partner, unless you accessed the Internal Reconciliation window from the business partner account balance. Reconciliation Currency If the currency of the specified business partner or partners is Local Currency or All Currencies, the reconciliation currency is the local currency. If one of the foreign currencies was specified for the business partners, the reconciliation currency is that foreign currency. Display LC-Only Transactions Select this checkbox to additionally display transactions that consist of amounts in local currency only. This option appears only when the reconciliation currency is foreign currency. Reconciliation Date Date on which reconciliation takes place. By default, the current date is displayed. Only open transactions with a posting date that is prior to the reconciliation date are displayed. You can change this date as needed. SAP Business One uses the reconciliation date when creating automatic journal entries to reflect exchange-rate differences, deferred or withholding tax, cash discounts, and do on. For more information, see Handling Exchange-Rate Differences, Underpayment and Overpayment Amounts, Withholding Tax, and Deferred Tax When Performing Internal Reconciliations. Table Area Selected Select the checkboxes for the transactions you want to reconcile. Alternatively, you can double-click the transaction row. Transaction No. Journal entry transaction number. To display the journal entry, click . By default, the Transaction No. field is not visible. To display this field, click (Form Settings). Origin Document or transaction type that initiated the posting of each transaction. To display the document, click . For a complete list of origins, see Transaction Type Abbreviations Legend in the online help for SAP Business One. Origin No. Number of the document that initiated the creation of the transaction; for example the number of the A/R invoice. Posting Date Posting date of the transaction row. Amount Original amount posted in the specific row of the transaction. This field is disabled. If the Display Credit Balance in Negative Sign checkbox is selected on the Basic Initialization tab in the Company Details window, a positive amount in the Amount field indicates a debit balance while a negative amount indicates a credit balance. © SAP AG 2010 12 SAP Business One 8.8 How to Work with Internal and External Reconciliations Field/Button Description/Activity Balance Due Unreconciled amount. If this amount is smaller than the value in the Amount field, it indicates this transaction has been partially reconciled internally. This field is disabled. If the Display Credit Balance in Negative Sign checkbox is selected on the Basic Initialization tab in the Company Details window, a positive amount in the Balance Due field indicates a debit balance while a negative amount indicates a credit balance. Amount to Reconcile Specify the amount you want to reconcile for this transaction row. The amount to reconcile must be greater than zero and smaller or equal to the Balance Due amount. By default, Amount to Reconcile equals Balance Due. The bottom of this column displays the accumulated balance of the selected transactions. A zero amount indicates balanced reconciliation. If the amount is not zero, you cannot perform reconciliation. To resolve this impasse, see step 4. Withholding Tax Withholding tax code for invoices and payments with withholding tax. If an invoice includes more than one withholding tax type, Multiple Withholding Tax Codes is displayed. By default, the Withholding Tax field is not visible. To display this field, click (Form Settings). Deferred Tax Indicates an invoice or credit memo with deferred tax. By default, the Deferred Tax field is not visible. To display this field manually, click (Form Settings). Adjustments Creates an adjustment if the amount at the bottom of the Amount to Reconcile column is not zero. For more information, see step 4 and Creating Adjustments. Print Settings Opens the Internal Reconciliation Printing Preference window in which you can define your preferences for reconciliation printing. For more information, see Printing Reconciled and Unreconciled Transactions for Specific Business Partners or G/L Accounts. 4. If the amount at the bottom of the Amount to Reconcile column is not zero, do one of the following: For at least one of the transactions, change the amount in the Amount to Reconcile field. For each transaction, the amount in the Amount to Reconcile field cannot be greater than the Balance Due amount. Create an adjustment. For more information, see Creating Adjustments. 5. To perform the reconciliation, choose the Reconcile button. Result For both fully and partially reconciled transactions, the Balance Due is updated. In addition, fully reconciled transactions are closed and do not appear in aging reports and in other reports unless the aging report is backdated to run before the reconciliation date. Example See Performing Partial Manual Reconciliation for Business Partner Transactions. Manually Reconciling Business Partner Transactions with Cash Discount If you use cash discounts, and you manually reconcile a payment with an invoice, SAP Business One compares the payment date to the due date of the invoice. If the payment date is earlier than the due date, © SAP AG 2010 13 SAP Business One 8.8 How to Work with Internal and External Reconciliations SAP Business One checks if the payer is entitled to a discount according to the payment terms appearing in the invoice with reference to the posting date of the payment selected for reconciliation. If a discount is warranted, SAP Business One updates the cash discount to which the business partner is entitled and the amount to reconcile. Once the reconciliation is completed, SAP Business One creates an appropriate journal entry that also reflects the cash discount. For more information, see How to Define Cash Discounts in Release 2007 A and 2007 B in the documentation area of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. Prerequisites The business partner selected for reconciliation is entitled to a cash discount for at least one of its open invoices. Procedure 1. Open the Internal Reconciliation window for the relevant business partner. For information on accessing this window, see Manually Reconciling Business Partner Transactions. 2. In the BP Internal Reconciliation - Selection Criteria window, select the Manual radio button. In the Business Partner field, specify the business partner you want to reconcile. 3. Choose the Reconcile button. 4. In the Internal Reconciliation window, to select one or more open invoices, double-click the invoice row or select the checkbox in the Selected column. 5. Select one of the payments using the same method. Once you have selected the payment, SAP Business One automatically calculates the cash discount value and updates it in the Cash Discount Amount field for each invoice. NOTE By default, the Cash Discount Amount field is not visible. After you select a payment, if the calculated cash discount is not zero, the Cash Discount Amount field automatically appears. To display this field manually, click (Form Settings). SAP Business One cannot calculate the cash discount for more than one payment. Therefore, if you select more than one payment, the cash discount is set to zero. You can then change it manually. This applies also to the case when you do not reconcile an invoice with a payment. The cash discount calculated by default is based on the value in the Amount to Reconcile field. You can change the value in the Cash Discount Amount field. 6. To complete the reconciliation, choose the Reconcile button. The reconciliation can be completed only if the total value in the Amount to Reconcile column is zero. Example See Performing Manual Reconciliation for Business Partner Transactions Using Cash Discount. Manually Reconciling Transactions Across Multiple Business Partners You can reconcile transactions for two or more business partners. This feature is useful if some of your customers and vendors have multiple accounts with your company. For example, if a specific business partner is a customer as well as a vendor and therefore has two different accounts, you can reconcile A/R invoices with A/P invoices of those accounts. In this way you can transfer amounts from one business partner account to another. Prerequisites All the business partners you want to reconcile together must use the same currency. Business partners for which all currencies are applicable (multicurrency business partners) also fulfill this prerequisite. © SAP AG 2010 14 SAP Business One 8.8 How to Work with Internal and External Reconciliations NOTE The reconciliation currency for multicurrency business partners is the local currency. Therefore, you cannot reconcile business partners using foreign currency together with multicurrency business partners. Procedure 1. From the SAP Business One Main Menu, choose Business Partners → Internal Reconciliations → Reconciliation. The BP Internal Reconciliation - Selection Criteria window appears. 2. Select the Manual radio button and the Multiple BPs checkbox. A table of business partners is displayed. 3. In the BP Code field, specify the business partners you want to reconcile. All the specified business partners must use the same currency. For each business partner you specify, the following information is displayed: Field Description BP Name Name of the business partner. BP Currency Code of the currency assigned to the business partner. The ## sign indicates that the All Currencies option is assigned as the currency of the business partner. Balance Due (LC) Current balance of the business partner in the local currency. A positive amount indicates a credit balance, and a negative amount indicates a debit balance. Balance Due (FC) Current balance of the business partner in the foreign currency. A value appears in this field only if a specific foreign currency was assigned to the business partner. If the currency of the business partner is either the local currency or All Currencies, this field is empty. A positive amount indicates a credit balance, and a negative amount indicates debit balance. NOTE If the Display Credit Balance in Negative Sign checkbox is selected on the Basic Initialization tab in the Company Details window, a positive amount in the Balance Due (LC) or in the Balance Due (FC) field indicates a debit balance while a negative amount indicates a credit balance. © SAP AG 2010 15 SAP Business One 8.8 How to Work with Internal and External Reconciliations 4. Choose the Reconcile button. The Internal Reconciliation window appears. SAP Business One displays all the open transactions for all the specified business partners. NOTE When you select multiple business partners in the selection criteria, the business partner code and name do not appear in the top-left corner of the window. To display the business partners’ (Form Settings). codes and names in the table of open transactions, click 5. Select the transactions you want to reconcile and choose the Reconcile button. For more information, see Manually Reconciling Business Partner Transactions. Result For both fully and partially reconciled transactions, the Balance Due is updated. In addition, fully reconciled transactions are closed and do not appear in aging reports and in other reports unless the report is backdated to run before the reconciliation date. If you reconcile transactions across multiple business partners, SAP Business One transfers the amounts from each business partner account to the other business partner or partners and updates the balances. As a result, an automatic journal entry with transaction type JR in the Origin field is created. This journal entry reflects those transfers. All the business partners and the amounts from the reconciled transactions appear in this journal entry, but on the opposite side (debit or credit), allowing SAP Business One to balance those amounts for each business partner account separately. Example See Performing Manual Reconciliation Across Multiple Business Partners. Manually Reconciling G/L Accounts During some business processes, related debit and credit transactions are posted to the same G/L account. The business process is completed only when the account has both a debit and a credit posting. During internal reconciliation you match pairs of debits and credits within the account. Sometimes unmatched transactions can indicate an incomplete business process or even an incorrect posting. For some accounts, incomplete processes could lead to more difficult and complicated asset or liabilities reporting. For information about performing an internal reconciliation for a subledger account linked to a control account, see Manually Reconciling Business Partner Transactions. © SAP AG 2010 16 SAP Business One 8.8 How to Work with Internal and External Reconciliations Procedure 1. To access the Internal Reconciliation window in which you can manually reconcile the selected business partner transactions, use one of the following methods: Navigate from the SAP Business One Main Menu. i. From the SAP Business One Main Menu, choose Financials → Internal Reconciliations → Reconciliation. The G/L Internal Reconciliation - Selection Criteria window appears. ii. Select the Manual radio button; in the G/L Account field specify the G/L account you want to reconcile. iii. Choose the Reconcile button. Navigate from the relevant G/L account balance window. i. ii. From the SAP Business One Main Menu, choose Financials → Chart of Accounts. next to the Balance field. Select the relevant G/L account and click The Account Balance - XXX, YYY window appears, where XXX is the G/L account code and YYY is the G/L account name. iii. Choose the Internal Reconciliation button. © SAP AG 2010 17 SAP Business One 8.8 How to Work with Internal and External Reconciliations The Internal Reconciliation window displays all the open unreconciled transactions for the selected G/L account up to the reconciliation date, which by default is the system date. 2. Specify the reconciliation date. Only the open transactions with a posting date prior to the reconciliation date are displayed. 3. Review the following information and select the transactions you want to reconcile. As you select a transaction, SAP Business One automatically recalculates the reconciliation difference. Field Description/Activity General Area G/L Account G/L account code. NOTE You can select a different G/L account, unless you accessed the Internal Reconciliation window from the account balance of the G/L account. Reconciliation Currency If the currency of the specified G/L account is Local Currency or All Currencies, the reconciliation currency is the local currency. Internal reconciliations for G/L accounts are always done in the local currency. Therefore, if you reconcile an account that is set as foreign currency, a journal entry is posted if an exchange-rate gain or loss occurs. For more information, see Handling Exchange-Rate Differences. Display LC-Only Transactions Enables you to additionally display transactions that consist of amounts in local currency only. This option appears only when the reconciliation currency is foreign currency. © SAP AG 2010 18 SAP Business One 8.8 How to Work with Internal and External Reconciliations Field Description/Activity Reconciliation Date Date on which reconciliation takes place. By default, the current date is displayed. Only open transactions with a posting date that is prior to the reconciliation date are displayed. You can change this date as needed. SAP Business One uses the reconciliation date when creating automatic journal entries to reflect exchange-rate differences, deferred or withholding tax, cash discounts, and so on. For more information, see Handling Exchange-Rate Differences, Underpayment and Overpayment Amounts, Withholding Tax, and Deferred Tax When Performing Internal Reconciliations. NOTE The fields in the table area for the manual reconciliation of a G/L account are that same as those for the manual reconciliation of a business partner. For field description of table-area fields, see Manually Reconciling Business Partner Transactions. 4. If the reconciliation difference is not zero, do one of the following: For at least one of the transactions, change the amount in the Amount to Reconcile field. For each transaction, the amount in the Amount to Reconcile field cannot be greater than the Balance Due amount. Create an adjustment by choosing the Adjustments button. The Journal Entry window appears so you can create a manual journal entry to an offsetting account. Once you add the journal entry, it is automatically added to the table in the Internal Reconciliation window and it is selected. 5. To perform the reconciliation, choose the Reconcile button. Result The fully reconciled transactions are closed and do not appear in aging reports and other reports. For partially reconciled transactions, the Balance Due is updated. Example See Performing Manual Reconciliation for G/L Accounts Using an Adjustment. Creating Adjustments If during the manual internal reconciliation process for a G/L account or for single or multiple business partners the reconciliation difference is not zero, you can either change the amount to reconcile or create an adjustment. 1. Open the Internal Reconciliation window for the relevant business partner. For information on accessing this window, see Manually Reconciling Business Partner Transactions. 2. Select the transactions you want to reconcile and choose the Adjustments button. © SAP AG 2010 19 SAP Business One 8.8 How to Work with Internal and External Reconciliations The Adjustments window appears. NOTE If you reconcile a G/L account, the only adjustment you can create is a manual journal entry. When you reconcile a G/L account and choose the Adjustments button, the Journal Entry window appears so you create a manual journal entry to an offsetting account. For more information, see step 4 in Manually Reconciling G/L Accounts. 3. To create an adjustment to balance the reconciliation difference for the business partner, select one of the following options: Create Journal Entry Create a manual journal entry to an offsetting account. Once you add the journal entry, it is added automatically to the table in the Internal Reconciliation window, and it is selected. Add Incoming Payment Create an incoming payment for the business partner. Add Outgoing Payment Create an outgoing payment for the business partner. Once you choose the OK button, the relevant window appears. Complete the transaction and choose the Add button. For more information, see the online help for SAP Business One. 4. To perform the reconciliation, choose the Reconcile button. Automatically Performing Internal Reconciliations You can perform automatic reconciliations when you need to reconcile a large number of transactions, or when you need to reconcile a range of business partners or G/L accounts. The process for automatically reconciling business partners’ transactions or automatically reconciling G/L accounts is very similar. When you perform automatic reconciliations, SAP Business One fully reconciles pairs of transactions. The reconciliation is performed separately for each business partner or G/L account successively. If you allow automatic reconciliations with differences, SAP Business One posts any differences found to the automatic reconciliation difference account. Prerequisites To perform automatic reconciliations with reconciliation differences, you have defined the automatic reconciliation differences account. For more information, see Preparing to Perform Automatic Reconciliations. Procedure 1. Open the selection criteria window for internal reconciliations: To automatically reconcile business partners, from the SAP Business One Main Menu, choose Business Partners → Internal Reconciliations → Reconciliation. To automatically reconcile G/L accounts, from the SAP Business One Main Menu, choose Financials → Internal Reconciliations → Reconciliation. The BP Internal Reconciliation - Selection Criteria window or the G/L Internal Reconciliation Selection Criteria window appears. © SAP AG 2010 20 SAP Business One 8.8 How to Work with Internal and External Reconciliations NOTE The G/L Internal Reconciliation - Selection Criteria window is identical, except the G/L Account field replaces the Business Partner field. © SAP AG 2010 21 SAP Business One 8.8 How to Work with Internal and External Reconciliations 2. Select the Automatic radio button and specify the following information: Field Description/Activity Business Partner From… To G/L Account From… To Range of business partner or G/L account codes you want to reconcile. Matching Rule 1, 2, 3 Matching rules that, when fulfilled, are the basis for automatic reconciliation. You can create up to three matching rules. Each rule must be based on a different parameter, so you cannot, for example, create two rules that refer to posting date. Select the following parameters as matching rules: • Posting Date • Due Date • Document Date • Ref. 1, 2, 3 • Project Code • Control Account Code • Posting Period If you select one of the first three parameters above, a Variation in Days field appears next to the matching-rule field. Specify the number of days used to consider the difference below which reconciliation takes place. When left empty, this field is considered to have a value of zero. EXAMPLE You selected Due Date as a matching rule and specified the Variation in Days as 3. The due date of an invoice is October 1, 2009, and there is a payment for the exact amount with the posting date of October 6, 2009. The difference is five days. In this case reconciliation does not take place. If you do not specify any matching rules, reconciliation is based on amount matching only. Reconciliation Difference Enables the reconciliation of pairs of transactions with nonidentical amounts. Specify the difference amount that should be considered when automatic reconciliation is performed. Differences found during reconciliation are posted to the automatic reconciliation difference account. For more information, see Preparing to Perform Automatic Reconciliations. 3. To perform the automatic reconciliation, choose the Reconcile button. Result SAP Business One automatically reconciles pairs of transactions that fulfill the specified matching rules for the range of business partners or G/L accounts. Semiautomatically Performing Internal Reconciliations You can perform semiautomatic reconciliations for business partner transactions and for G/L accounts. The reconciliation is done manually, based on recommendations provided by SAP Business One. The process for semiautomatically reconciling business partner transactions or semiautomatically reconciling G/L accounts is very similar. © SAP AG 2010 22 SAP Business One 8.8 How to Work with Internal and External Reconciliations Procedure 1. Open the selection criteria window for internal reconciliations: To semiautomatically reconcile business partners, from the SAP Business One Main Menu, choose Business Partners → Internal Reconciliations → Reconciliation. To semiautomatically reconcile G/L accounts, from the SAP Business One Main Menu, choose Financials → Internal Reconciliations → Reconciliation. The BP Internal Reconciliation - Selection Criteria window or the G/L Internal Reconciliation Selection Criteria window appears. NOTE The G/L Internal Reconciliation - Selection Criteria window is identical, except the G/L Account field replaces the Business Partner field. 2. Select the Semi-Automatic radio button; in the Business Partner or G/L Account field specify the business partner or the G/L account you want to reconcile. © SAP AG 2010 23 SAP Business One 8.8 How to Work with Internal and External Reconciliations In addition, you can define and prioritize parameters to be considered when SAP Business One generates reconciliation recommendations: Field Description/Activity Parameters SAP Business One can take into account certain parameters when preparing reconciliation recommendations. You can define the following parameters: • Amount Enables SAP Business One to include transactions with different amounts in the reconciliation recommendations. See also the Max. Deviation field. NOTE This parameter influences the recommendation results only. If you choose to reconcile transactions with an amount difference (based on the recommendations), you must create the respective balancing transaction to complete the reconciliation. • Date Select the date on which the reconciliation recommendations should be based: posting date, due date, or the document date. See the also Max. Deviation field. • Reference Select the reference according to which you want the reconciliation recommendations to be made. Priority Weighting Determines the priority order in which each parameter is used by SAP Business One when ranking the generated recommendations. Specify the weighting to each parameter: High, Medium, Low, or Skip. If you select Skip, SAP Business One ignores the parameter when it is generating the reconciliation recommendations. For more information, see Appendix: Rank Calculation in Reconciliation Recommendations. Max. Deviation Specify the maximum deviation SAP Business One should consider when generating the reconciliation recommendations for the following parameters: • Amount Specify the maximum difference between transaction amounts above which SAP Business One will not recommend reconciliation. If you do not specify an amount, SAP Business One includes transactions with no amount differences in the reconciliation recommendations. • Date Specify the difference in number of days between the dates assigned to the transactions above which SAP Business One will not recommend reconciliation. If you selected to consider this parameter and you do not specify any value, SAP Business One includes transactions with no date differences in the reconciliation recommendations. 3. To generate the reconciliation recommendations, choose the Reconcile button. © SAP AG 2010 24 SAP Business One 8.8 How to Work with Internal and External Reconciliations The Reconciliation window appears. In the Open Transactions on Debit Side and in the Open Transactions on Credit Side tables, SAP Business One displays the list of transactions with unreconciled amounts greater than zero. 4. View the displayed information for each transaction: Field Description General Area BP or G/L Account Business partner or G/L account code for which the reconciliation is performed. Reconciliation Currency Currency of the reconciliation. This depends on the currency defined for the selected business partner or G/L account. If the currency assigned to the selected business partner or G/L account is All Currencies, the local currency is displayed; the reconciliation is performed in the local currency. Table Area Trans. No. Journal entry number as it appears in the Trans. No. field in the Journal Entry window. To open the journal entry, click . Posting Date or Due Date or Document Date Posting date, due date, or document date of the transaction row, depending on which value you specified in the selection criteria window. Ref. 1 or Ref. 2 or Ref. 3 Reference 1, 2, or 3, of the transaction row, depending on the reference specified in the selection criteria window. Balance Due Amount to be reconciled. If the transaction was partially reconciled previously, this amount is smaller than the original amount posted in the transaction. NOTE To perform manual reconciliations not based on the recommendations, choose the Manual button. The Internal Reconciliation window appears. For more information, see Manually Reconciling Business Partner Transactions. 5. To see a list of recommended reconciliations for a transaction, double-click that transaction row. © SAP AG 2010 25 SAP Business One 8.8 How to Work with Internal and External Reconciliations The Reconciliation Recommendations window appears. SAP Business One displays the selected transaction and below it a separate list of reconciliation recommendations for the selected transaction, sorted in order of rank starting with the highest rank. The rank reflects the level of matching between the selected transaction and the proposed transactions. It is calculated according to the parameters and the priority weighting you specified in the Internal Reconciliation - Selection Criteria window. For more information, see Appendix: Rank Calculation in Reconciliation Recommendations. 6. To select a recommendation from the list of reconciliation recommendations, click once in the row of the desired recommendation. To perform the reconciliation, choose the Reconcile button. NOTE If you choose to reconcile transactions with an amount difference (based on the recommendations), the Journal Entry window appears, and you must create the respective balancing transaction to complete the reconciliation. If you decide not to reconcile the transaction that appears at the top of the window and instead want to display the next transaction in the Reconciliation window, choose the Skip button. SAP Business One then displays the next transaction at the top of the window. Result SAP Business One reconciles the selected transactions. Example See Performing Semiautomatic Internal or External Reconciliations. © SAP AG 2010 26 SAP Business One 8.8 How to Work with Internal and External Reconciliations Managing Previous Internal Reconciliations You can view the history of all internal reconciliations performed for a specified range of business partners or G/L accounts. You can also cancel internal manual, automatic, and semiautomatic reconciliations. To reverse other reconciliation types, you must cancel the transaction that created the reconciliation. For a list of all reconciliation types, see step 3 in Viewing Internal Reconciliation History. EXAMPLE After you create a payment for an invoice, SAP Business One automatically reconciles the payment with the invoice. You must cancel the payment to reverse the reconciliation. When you cancel a specific transaction, SAP Business One automatically creates a reversal reconciliation between the canceled transaction and its other linked transactions. Viewing Internal Reconciliation History 1. To open the Manage Previous Internal Reconciliations - Selection Criteria window, use one of the following paths: From the SAP Business One Main Menu, choose Business Partners → Internal Reconciliations → Manage Previous Reconciliations. From the SAP Business One Main Menu, choose Financials → Internal Reconciliations → Manage Previous Reconciliations. 2. From the Previous Reconciliation for dropdown list, select to display previous reconciliations for business partners or for G/L accounts and specify the following selection criteria: Field Description/Activity G/L Acct/BP Code From… To Range of business partners or G/L accounts, depending on your selection in the Previous Reconciliation for field. Date From… To Range of dates to display reconciliations performed within this range. Reconciliation No. From… To Range of numbers identifying the reconciliations SAP Business One should display. 3. Choose the OK button. © SAP AG 2010 27 SAP Business One 8.8 How to Work with Internal and External Reconciliations The Manage Previous Internal Reconciliations window appears. The Manage Previous Internal Reconciliations window lists the previous internal reconciliations that match the selection criteria you specified in the Manage Previous Internal Reconciliations - Selection Criteria window. This window contains two tables: Reconciliation History – Lists previous reconciliations. Reconciliation Details – Lists the transaction rows associated with the selected reconciliation from the Reconciliation History table. View the following information displayed in both tables: Field Description Reconciliation History Recon. No. Sequential reconciliation number assigned to the internal reconciliation by SAP Business One when the reconciliation took place. All reconciliations created by SAP Business One are assigned a unique application-wide reconciliation number irrespective of the type of the reconciliation and irrespective of business partners and G/L accounts. The numbering starts from 1 and continues sequentially for each subsequent reconciliation. Recon. Amount Total amount of the reconciliation. Recon. Type Type of reconciliation, based on whether the reconciliation is a result of document creation or user initiation: © SAP AG 2010 • Automatic Reconciliation was performed by selecting the Automatic option in the BP Internal Reconciliation - Selection Criteria or in the G/L Internal Reconciliation - Selection Criteria window. • Bank Statement Processing Reconciliation was performed by bank-statement processing functionality according to user-defined matching rules. For more 28 SAP Business One 8.8 Field How to Work with Internal and External Reconciliations Description information about external reconciliations in bank statement processing, see the online help for SAP Business One and How to Use Bank Statement Processing in Release 2007 in the documentation area of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. • BoE Reconciliation was performed by the bill of exchange functionality. For more information about bills of exchange, see the online help for SAP Business One and How to Manage Bills of Exchange in 2007 A and in 2007 B in the documentation area of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. • Cancellation Reconciliation was canceled by using the Cancel Reconciliation button in this window. • Credit Memo Reconciliation is the result of copying an A/P or A/R invoice to an A/P or A/R credit memo. • Deposit Reconciliation is the result of creating a deposit for checks, cash, credit card vouchers, or bills of exchange. • Manual Reconciliation was performed manually. • Payment Reconciliation is the result of creating an incoming or outgoing payment for specific documents or transactions. • Period Closing Reconciliation was performed automatically when a period-end closing adjustment was created at the end of the year or the period. • Reversal Reconciliation is the result of canceling the following documents: Journal entries Incoming and outgoing payments Deposits Check for payments • Semi-Automatic Reconciliation was performed by selecting a transaction from the Reconciliation Recommendations window. • Zero Value Reconciliation is the result of posting a zero-value invoice, credit memo, or journal entry. Recon. Rule 1, 2, 3 Reconciliation rules selected in the selection criteria for automatic and semiautomatic reconciliation types. Reconciliation Date Date on which reconciliation took place: © SAP AG 2010 • For manual reconciliation, this is the date specified in the Reconciliation Date field in the Internal Reconciliation window. • For reconciliations resulting from document creation (payments, credit memos), the reconciliation date is the latest posting date of all 29 SAP Business One 8.8 Field How to Work with Internal and External Reconciliations Description the included documents in the reconciliation. EXAMPLE An incoming payment is created for two different A/R invoices that were created a week ago and two days ago. The posting date of the incoming payment is the current date. This is considered as the reconciliation date in this case. Cancelling/Cancelled Reconciliation Number Number of the canceled reconciliation if the reconciliation is the result of canceling a previous reconciliation. In addition, in the canceled reconciliation row the canceling reconciliation number is displayed. Previous Data Old Recon. No. The Previous Data checkbox and the Old Recon. No. field are relevant for companies that upgraded from previous releases to SAP Business One 2007 A. For all the internal reconciliations that existed before the upgrade, the Previous Data checkbox is selected; the old reconciliation number is recorded in the Old Recon. No. field. For technical reasons, all reconciliations are renumbered after upgrade to SAP Business One 2007 A. Keeping a record of the old reconciliation number lets you relate back to any printouts you may have made from your previous SAP Business One release. NOTE For more information, see How to Conduct an Internal Reconciliation Upgrade in the documentation area of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. Reconciliation Details Trans. Journal entry transaction number. To display the journal entry, click Origin Document or transaction type that initiated the posting of each transaction. To display the document or the transaction, click . For a complete list of origins, see Transaction Type Abbreviations Legend in the online help for SAP Business One. Origin No. Number of the document that initiated the creation of the transaction, for example, the number of the A/R invoice. G/L Acct/BP Code Code of the G/L account or business partner to which the reconciled transaction row was posted. Ref. 1 Value in the Ref. 1 field in the reconciled transaction. Due Date Due date specified in the reconciled transaction row. Amount Original amount of the reconciled transaction row. Amounts in parentheses reflect negative amounts. If the Display Credit Balance in Negative Sign checkbox is selected on the Basic Initialization tab in the Company Details window, a positive amount in the Amount field indicates a debit amount while a negative amount indicates a credit amount. Cash Discount Amount Amount of cash discount that was given on the transaction row and reconciled in this reconciliation. Applied Amount Amount from the transaction row that was reconciled in this reconciliation. When the value in Applied Amount is different from the value displayed in the Amount field, it indicates that the transaction row is partially reconciled © SAP AG 2010 . 30 SAP Business One 8.8 Field How to Work with Internal and External Reconciliations Description by this reconciliation. 4. In the Reconciliation History table, select the relevant reconciliation. The transactions associated with the selected reconciliation are displayed in the Reconciliation Details table. Canceling Previous Internal Reconciliations 1. To open the Manage Previous Internal Reconciliations - Selection Criteria window, use one of the following paths: From the SAP Business One Main Menu, choose Business Partners → Internal Reconciliations → Manage Previous Reconciliations. From the SAP Business One Main Menu, choose Financials → Internal Reconciliations → Manage Previous Reconciliations. 2. From the Previous Reconciliation for dropdown list, select to display previous reconciliations for business partners or for G/L accounts. Specify the selection criteria and choose the OK button. For more information, see Viewing Internal Reconciliation History. 3. In Reconciliation History table in the Manage Previous Internal Reconciliations window, select the reconciliation to be canceled. You can cancel only Manual, Automatic, and Semi-Automatic reconciliations. 4. To cancel the reconciliation, choose the Cancel Reconciliation button. NOTE You cannot cancel reconciliations resulting from the following transactions: Incoming or outgoing payments for specific transactions A/P or A/R credit memo based on existing document Reversal journal entry Canceled reconciliation If you select this type of reconciliation, the Cancel Reconciliation button is disabled. Result SAP Business One saves the canceled reconciliation and adds it to the reconciliations history. When you cancel a reconciliation, SAP Business One reopens all the transactions that are involved in the reconciliation. SAP Business One also creates reversal journal entries for journal entries that were posted automatically by the reconciliation for cash discounts, exchange-rate postings, and other automatic transactions. When you cancel a reconciliation that involved several business partners, SAP Business One creates a reversal reconciliation for each JR transaction for the business partner. SAP Business One does not reverse manual journal entries you posted as adjustments. Example See Canceling Previous Internal Reconciliation. Viewing Applied Transactions for a Specific Transaction You can view details of all transactions that were reconciled with any specific transaction during any type of internal reconciliation process as well as transactions that are no longer associated with a specific transaction due to a cancellation of the reconciliation. You can view the applied transactions from any journal entry or from any document for which a journal entry was created. For internal reconciliations, you can view the applied transactions from the Internal Reconciliation window or from the Manage Previous Internal Reconciliations window. © SAP AG 2010 31 SAP Business One 8.8 How to Work with Internal and External Reconciliations 1. Open the Internal Reconciliation window or the Manage Previous Internal Reconciliations window. For more information, see Manually Reconciling Business Partner Transactions and Viewing Internal Reconciliation History. 2. Select a transaction row in the Internal Reconciliation window or in the Reconciliation Details section in the Manage Previous Internal Reconciliations window. Right-click the transaction row and choose Applied Transactions. Alternatively, from the Goto menu choose Applied Transactions. The Applied Transactions window appears: The first row in the window refers to the transaction row you selected in the Internal Reconciliation window or in the Reconciliation Details section in the Manage Previous Internal Reconciliations window. The other rows refer to all transactions that have been applied to the transaction in the first row. 3. View the following information: NOTE By default, some of the described fields are not visible. To display them, click Settings). (Form Field Description/Activity Origin Document or transaction type that initiated the posting of each transaction. For the first row, click (Expand) or (Collapse) icons. For a complete list of origins, see Transaction Type Abbreviations Legend in the online help for SAP Business One. Origin No. Number of the document that initiated the creation of the transaction, such as the number of the A/R invoice. To display the document, click . Trans. No. Journal entry transaction number. To display the journal entry, click Row No. Row number in the corresponding journal entry identified by the Tran. No. field. Recon. Type Type of reconciliation, based on whether the reconciliation is a result of document creation or user initiation. This field is the same field as in the Manage Previous Internal Reconciliations window. For more information, see Viewing Internal Reconciliation History. Posting Date Posting date of the transaction row. Date Applied Reconciliation date of the transaction row. Amount Amount of the original transaction. Cash Discount Amount Amount of cash discount posted on reconciliation. © SAP AG 2010 . 32 SAP Business One 8.8 How to Work with Internal and External Reconciliations Field Description/Activity Open Balance Unreconciled amount from the transaction row. Applied Amount Amount of the transaction row that was reconciled with the transaction row. Reconciliation No. Reconciliation number with which the transactions is associated. To display details of the reconciliation, click . Date Closed Date the transaction was fully reconciled. G/L Account/Business Partner Code Reconciliation Rule 1, 2, 3 G/L account or business partner code to which the transaction relates. Reconciliation rules selected in the selection criteria for automatic and semiautomatic reconciliation types. Printing Internal Reconciliations You can print manual, automatic, and semiautomatic internal reconciliations. You can print both reconciled and unreconciled transactions for selected business partners or for G/L accounts, or print selected previous internal reconciliations. Printing Reconciled and Unreconciled Transactions for Specific Business Partners or G/L Accounts 1. To open the Internal Reconciliations - Selection Criteria window, use one of the following paths: From the SAP Business One Main Menu, choose Business Partners → Internal Reconciliations → Reconciliation. From the SAP Business One Main Menu, choose Financials → Internal Reconciliations → Reconciliation. 2. In the selection criteria window, select the manual reconciliation type option and specify a business partner or a G/L account. To perform reconciliations for the selected business partner or G/L account, choose the Reconcile button. For more information, see Manually Reconciling Business Partner Transactions. 3. In the Internal Reconciliation window, choose the Print Settings button. The Internal Reconciliation Printing Preferences window appears. 4. Specify the following: To print reconciliations, select the Print Reconciliations checkbox. When you select this checkbox, the following options appear: © SAP AG 2010 33 SAP Business One 8.8 How to Work with Internal and External Reconciliations New Reconciliations Only Prints only the reconciliations that SAP Business One is about to perform. New and Old Reconciliations Prints reconciliations that were created in the past as well as the ones that SAP Business One is about to perform. When you select this option, additional fields appear that enable you to specify the reconciliation number range. To print unreconciled transactions, select the Unreconciled Transactions checkbox. When you select this option, the Sorting 1 and Sorting 2 fields appear. Use these fields to define the sorting order of the unreconciled transactions for the purpose of printing. You can sort by Transaction No., by Due Date, or by Ref. 1. 5. To save your changes, choose the Update button. 6. From the Tools menu, choose Print Layout Designer or click 7. Choose the preferred printing template. 8. Print the document. in the toolbar. NOTE You can edit the default templates or create new ones by using Print Layout Designer (PLD). For more information, see How to Customize Printing Templates with Print Layout Designer in the documentation area of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. Printing Previous Internal Reconciliations 1. Open the Manage Previous Internal Reconciliations - Selection Criteria window. For more information, see Viewing Internal Reconciliation History. 2. From the Previous Reconciliation for dropdown list, select to display previous internal reconciliations for business partners or for G/L accounts and specify the selection criteria. Choose the OK button. 3. In the Reconciliation History table in the Manage Previous Internal Reconciliations window, select the reconciliations you want to print. 4. From the Tools menu, choose Print Layout Designer or click 5. Choose the preferred printing template. 6. Print the document. in the toolbar. NOTE You can edit the default templates or create new ones by using Print Layout Designer (PLD). For more information, see How to Customize Printing Templates with Print Layout Designer in the documentation area of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. Handling Exchange-Rate Differences, Underpayment and Overpayment Amounts, Withholding Tax, and Deferred Tax When Performing Internal Reconciliations Handling exchange-rate differences, withholding tax, and deferred tax is done in the same way whether performing manual, automatic, or semiautomatic internal reconciliations. Underpayment and overpayment amounts are relevant only for manual internal reconciliations. Handling Exchange-Rate Differences Exchange-rate differences are recognized only for business partners and for G/L accounts using foreign currency as their currency. To reconcile transactions that create exchange-rate differences, you must define gain and loss accounts for realized exchange-rate differences. For more information, see Preparing to Perform Internal Reconciliations with Exchange-Rate Differences. © SAP AG 2010 34 SAP Business One 8.8 How to Work with Internal and External Reconciliations When you perform internal reconciliations for business partners and for G/L accounts that use foreign currency as their currency, the Amount to Reconcile in local currency (LC) is calculated using the following formula: Amount to Reconcile in LC = the Amount to Reconcile in FC / the balance due in FC times the balance due in LC. NOTE This means that if the Amount to Reconcile in FC equals the balance due in FC, then the Amount to Reconcile in LC equals the balance due in LC. After you reconciled some transactions, the total reconciled amount in local currency not equal zero reflects exchange-rate gain or loss. SAP Business One creates a journal entry to reflect this difference. When the exchange-rate difference is on the credit side, it is a gain; when it is on the debit side, it is a loss. NOTE When reconciling a vendor who is using foreign currency, the posting behavior of an exchangerate difference is identical to reconciling a customer but with the debit and credits reversed. Example You manually reconciled the following transactions for one your customers: Transaction Type Balance Due Amount to Reconcile Balance Due after Reconciliation FC – EUR LC – USD FC – EUR LC – USD FC – EUR LC – USD Invoice 1 100 150 90 135 10 15 Invoice 2 100 120 100 120 0 0 Payment (250) (400) (190) (304) (60) (96) 0 (49) Total For example, when you reconciled EUR 90, then the reconciled amount in LC is 135 = 90/100 X 150. As a result of this reconciliation, an exchange-rate difference occurred, and SAP Business One creates the following journal entry: G/L Account/Business Partner Debit (FC) Customer account 0 Realized exchange difference gain account Credit (FC) Debit (LC) Credit (LC) 49 0 49 Handling Underpayment and Overpayment Amounts You can use underpayments and overpayments when you are working with incoming and outgoing payments in local currency. If you allow underpayment and overpayment amounts, you can use them when you perform manual internal reconciliations. As a result of reconciliation, SAP Business One posts the amount to the defined underpayment or overpayment account. For information about the settings and definitions for allowing underpayments and overpayments, see Preparing to Perform Internal Reconciliations with Underpayment or Overpayment Amounts. When you perform manual internal reconciliation, and you manually change Amount to Reconcile of a payment, overpayment processing is possible if the following two conditions are met: • Amount to Reconcile is less than or equal to Balance Due. • Amount to Reconcile is greater than or equal to Balance Due minus Under/Overpayment Amount Allowed. © SAP AG 2010 35 SAP Business One 8.8 How to Work with Internal and External Reconciliations When you perform manual internal reconciliation, and you manually change Amount to Reconcile of a payment, underpayment processing is possible if the following two conditions are met: • Amount to Reconcile is greater than or equal to Balance Due. • Amount to Reconcile is less than or equal to Balance Due plus Under/Overpayment Amount Allowed. NOTE When underpayment is allowed, for payment rows in the Internal Reconciliation window, the value in Amount to Reconcile can be greater than the value of the Balance Due. The Amount to Reconcile can be set to be equal to Balance Due plus the Under/Overpayment Amount Allowed. Once the reconciliation is complete, the payment is fully reconciled and the balance due is zero. Therefore, it is no longer appears in the Internal Reconciliation window. In addition, SAP Business One creates a journal entry to reflect the amount of underpayment or overpayment. Example of Overpayment • Value of the Under/Overpayment Amount Allowed field for incoming payments is USD 0.05. • In the Internal Reconciliation window, in the payment row, Balance Due is USD 100.04, and you manually changed Amount to Reconcile to USD 100. • Overpayment processing is possible because the following conditions are met: Amount to Reconcile is less than Balance Due: 100 < 100.04. Amount to Reconcile is greater than (Balance Due minus Under/Overpayment Amount Allowed): 100 > (100.04 minus 0.05 = 99.99) • When the reconciliation is completed, SAP Business One posts the difference to the overpayment A/R account: G/L Account/Business Partner Debit Customer account 0.04 Overpayment A/R account Credit 0.04 Example of Underpayment • Value of the Under/Overpayment Amount Allowed field for incoming payments is USD 0.05. • In the Internal Reconciliation window, in the payment row, Balance Due is USD 100 and you manually changed Amount to Reconcile to USD 100.02. • Underpayment processing is possible because the following conditions are met: Amount to Reconcile is greater than Balance Due: 100.02 > 100. Amount to Reconcile is less than (Balance Due plus Under/Overpayment Amount Allowed): 100.02 < (100 plus 0.05 = 100.05) • When the reconciliation is completed, SAP Business One posts the difference to the underpayment A/R account: G/L Account/Business Partner Debit Customer account Underpayment A/R account Credit 0.02 0.02 Handling Withholding Tax Withholding tax can be processed during the internal reconciliation process only if all the reconciled payments, invoices, and the other transactions use the same withholding tax code. © SAP AG 2010 36 SAP Business One 8.8 How to Work with Internal and External Reconciliations In the Internal Reconciliation window, the Withholding Tax field displays the withholding tax code for invoices and payments with withholding tax. If an invoice includes more than one withholding tax type, Multiple Withholding Tax Codes is displayed. For more information, see step 3 in Manually Reconciling Business Partner Transactions. If you are using withholding tax and you reconcile transactions across multiple business partners, you can reconcile A/R invoices with A/P invoices that have the same withholding tax code; however, the withholding tax is not processed. Handling Deferred Tax For deferred tax accounting, invoices and credit memos relate to deferred tax if you selected the Deferred Tax checkbox on the Accounting tab in the invoice/credit memo window. Deferred tax is recognized during the reconciliation process when you reconcile deferred tax invoices with payments. In those cases SAP Business One creates a journal entry reflecting the tax that is calculated in proportion to the partial payment. When you reconcile deferred tax invoices with deferred-tax credit memos, deferred tax is not recognized and no journal entry is created. In the Internal Reconciliation window, the Deferred Tax checkbox is selected for invoices or credit memos with deferred tax. For more information, see step 3 in Manually Reconciling Business Partner Transactions. You cannot reconcile journal entries with deferred tax documents or deferred tax invoices together with both deferred credit memos and payments. In addition, you cannot reconcile deferred tax documents if you reconcile transactions across multiple business partners. Example There are two open transactions: • A/R invoice with total amount of 110, including tax. The deferred tax for this invoice is 10. • Incoming payment with amount of 55. When you reconcile the incoming payment with the invoice, SAP Business One creates the following journal entry, and the tax is calculated in proportion to the partial payment: G/L Account/Business Partner Debit Deferred tax account 5 = (55/110) X 10 Tax account Credit 5 NOTE The debit and the credit postings are reversed in the case where you reconcile an A/P invoice with an outgoing payment. © SAP AG 2010 37 SAP Business One 8.8 How to Work with Internal and External Reconciliations Working with External Reconciliations You can perform external reconciliations manually, automatically, or semiautomatically for bank and business partner accounts. Usually you reconcile open transactions with recorded transactions from bank statements, but you can also reconcile business partner account statements. For external bank statement reconciliations, SAP Business One supports three different processes, each of which is relevant for different localizations: • Recording transactions from bank statements using the Process External Bank Statement window and then reconciling the transactions using the reconciliation function. This process is relevant for all localizations. For more information, see Manually Performing External Reconciliations, Automatically Performing External Reconciliations, and Semiautomatically Performing External Reconciliations. • Verifying the transactions recorded in SAP Business One with the balance received from the bank or other external source and creating adjustments, if required, using the manual reconciliation function. This process is relevant for the following localizations: Australia, Brazil, Canada, China, Cyprus, India, Japan, Korea, New Zealand, Singapore, South Africa, United Kingdom, and United States. For more information, see Manually Reconciling Bank Statements: AU, BR, CA, CN, CY, IN, JP, KO, SG, UK, US, and ZA. • Recording and reconciling bank statements using the bank statement processing function. Bank statement processing is supported for the following localizations: Austria, Belgium, Brazil, China, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Hungary, India, Italy, Japan, Korea, Netherlands, Norway, Poland, Russia, Singapore, Slovakia, Spain, Sweden, Switzerland, and United Kingdom. For more information, see Working with External Reconciliations When Using the Bank Statement Processing Functionality. For more information about external reconciliations in bank statement processing, see the online help for SAP Business One and How to Use Bank Statement Processing in Release 2007 in the documentation area of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. In addition to performing reconciliations, you can also do the following: • Create balancing transactions and adjustments • Print reconciliations when you manually or automatically perform external reconciliations • View the history of previous external reconciliations • Cancel and re-create previous external reconciliations Working with External Reconciliations When Using the Bank Statement Processing Functionality NOTE Bank statement processing is supported for the following localizations: Austria, Belgium, Brazil, China, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Hungary, India, Italy, Japan, Korea, Netherlands, Norway, Poland, Russia, Singapore, Slovakia, Spain, Sweden, Switzerland, and United Kingdom. If bank statement processing is activated in SAP Business One, you should perform external reconciliations within the bank statement processing functionality. You cannot use the Process External Bank Statement window to record and reconcile transactions from your bank statements, and we recommend that you do not use the manual reconciliation function for this purpose. If your company uses bills of exchange and works with bank statement processing, do not perform external reconciliations in the Bill of Exchange Management window. In addition, bank transactions recorded in bank statement processing are not displayed in either the Check and Restore Previous External Reconciliations window or the Manage Previous External Reconciliations window. For more information about external reconciliations in bank statement processing, see the online help for SAP Business One and How to Use Bank Statement Processing in Release 2007 in the documentation area of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. © SAP AG 2010 38 SAP Business One 8.8 How to Work with Internal and External Reconciliations Recording Transactions from External Statements To record transactions from your external bank or business partner statements, use the Process External Bank Statement window. You can enter information manually or automatically. Later, to reconcile these transactions with the transactions recorded in the books, use the reconciliation function. NOTE If you are using bank statement processing functionality, you cannot use the Process External Bank Statement window to record transactions from your bank statements. You can still access all transactions recorded in this window in the Statement Evidence window after bank statement processing is activated. For more information about external reconciliations in bank statement processing, see the online help for SAP Business One and How to Use Bank Statement Processing in Release 2007 in the documentation area of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. Procedure 1. From the SAP Business One Main Menu, choose Banking → Bank Statements and External Reconciliations → Process External Bank Statement. NOTE The function for processing external bank statements is invisible by default in the SAP Business One Main Menu for the following localizations: Australia, Brazil, Canada, China, Cyprus, India, Japan, Korea, New Zealand, Singapore, South Africa, United Kingdom, and United States. For more information, see Manually Reconciling Bank Statements: ANZ, BR, CA, CN, CY, IN, JP, KO, SG, UK, US, and ZA. To display this feature in the SAP Business One Main Menu, click The Process External Bank Statement window appears. (Form Settings). 2. From the G/L Account or BP dropdown list, to record transactions from your bank statements, select G/L Account; to record transactions from your business partner’s statements, select BP. Specify the code of the G/L account or business partner for which you want to record the transactions. The Page Currency field automatically displays the currency defined for the G/L account or the business partner you specified. This is the currency in which the amounts posted to this page are calculated. NOTE If All Currencies is defined for the specified G/L account or the business partner, the currency displayed is the local currency. Reconciliations and transactions of All Currencies entities are performed and calculated in the local currency. 3. Move the cursor to the first empty row and specify the following information as it appears in the statement you received from the bank or the business partner: © SAP AG 2010 39 SAP Business One 8.8 How to Work with Internal and External Reconciliations Field/Button Description/Activity Reconciled Reconciliation number of the transactions for which you performed external reconciliations. For unreconciled transactions, this field is blank. Date Specify the date that appears in the statement received from the external account. Reference Details 1, 2 Specify the reference and relevant details as they appear in the statement received from the external account; for example, fee or deposit. Debit Amount Credit Amount Specify the respective debit or credit amount from the external account statement. Current Balance Expected current balance of the G/L account or the business partner calculated automatically by SAP Business One for each row based on the information you specified from the statement. Negative balances are indicated by a minus sign. Recalculate Refreshes and updates the expected current balance in the external account statement. End of Page Moves the cursor to the first empty row at the end of the table. This can be useful when you have many transactions in the table, and you want to go instantly to the first empty row. 4. If you record transactions from your bank statements, to create an automatic incoming payment linked to an existing invoice, select the Create Payment checkbox and specify the customer code and the existing invoice number. For more information, see Automatically Creating Incoming Payments to Reconcile Bank Statements. 5. To save the information, choose the Update button. Result SAP Business One updates the list of external transactions and the expected current balance of the G/L account or the business partner according to the statement. You can later reconcile those transactions. Automatically Creating Incoming Payments to Reconcile Bank Statements In the Process External Bank Statement window, if the amount recorded in a row is a credit amount and represents an incoming payment from a customer using a bank transfer, SAP Business One can create the relevant incoming payment document automatically. 1. From the SAP Business One Main Menu, choose Banking → Bank Statements and External Reconciliations → Process External Bank Statement. 2. From the G/L Account or BP dropdown list select G/L Account and specify the code of the G/L account for which you want to record the incoming payment. 3. Move the cursor to the first empty row and specify the details as they appear on the statement you received from the bank. For more information, see Recording Transactions from External Statements. 4. To create an automatic incoming payment, select the Create Payment checkbox and specify the following information: Field Description/Activity Doc. No. Number of the document, the payment reference number, or the ISR, depending on the selected transaction type in the Transact. Type field. BP Code BP Name Customer code. The customer name automatically appears in the BP Name field. External Code External bank code and the statement number as it appears in the © SAP AG 2010 40 SAP Business One 8.8 How to Work with Internal and External Reconciliations Field Description/Activity Statement No. statement. Transact. Type From the dropdown list, select one of the following options: • P = Payment Reference No. Relevant for Belgium localization. The payment reference number is an additional key for the A/R invoice that is used to match a payment with the A/R invoice. • I = ISR Relevant for Switzerland localization. When you send invoices to your customers, you send an additional document that contains all the details of the payment that the customer has to make, including your bank details, the amount to be paid, and a payment reference number. • D = Doc Num Document number of the invoice 5. To save the information, choose the Update button. Result SAP Business One creates an incoming payment using a bank transfer. Then SAP Business One creates two reconciliations: • Internal reconciliation for the incoming payment with the invoice of the customer. The reconciliation type set for this reconciliation is Payment. • External reconciliation for the incoming payment with the transaction from the bank statement. The reconciliation type set for this reconciliation is Manual. Manually Performing External Reconciliations You can manually perform reconciliations when you want to reconcile a small number of transactions, cases where partial reconciliations are required, or transactions posted to more than one business partner or G/L account. You reconcile between matching transactions, and, if required, perform balancing transactions to match your data with that of the bank or business partner. NOTE If bank statement processing is activated in SAP Business One, you should perform external reconciliations directly within the bank statement processing functionality. You should not use the External Reconciliation window to reconcile transactions from your bank statements. For more information about external reconciliations in bank statement processing, see the online help for SAP Business One and How to Use Bank Statement Processing in Release 2007 in the documentation area of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. © SAP AG 2010 41 SAP Business One 8.8 How to Work with Internal and External Reconciliations 1. From the SAP Business One Main Menu, choose Banking → Bank Statements and External Reconciliations → Reconciliation. The External Reconciliation - Selection Criteria window appears. 2. To specify whether to reconcile transactions of a business partner or G/L account, from the Select Source dropdown list select Business Partner or G/L Account. 3. Select the Manual radio button and specify the information in the following fields: From… To In the From field, specify a business partner or a G/L account code you want to reconcile. This field is mandatory. Due Date To Displays by default the current date; specify a different date if required. Transactions with a due date earlier or equal to the displayed date will be reconciled. 4. Choose the Reconcile button. The External Reconciliation window appears. © SAP AG 2010 42 SAP Business One 8.8 How to Work with Internal and External Reconciliations The window is divided into four tables: The tables on the left display the open transactions in the books; the tables on the right display the open transactions in external statements. The upper tables display the open transactions on both sides (books/bank for external reconciliation) that meet the selection criteria in the External Reconciliation - Selection Criteria window. The lower tables display the transactions that you selected for reconciliation. View or modify the following information: Field/Button Description/Activity General Area G/L Account or BP Displays the G/L account or business partner code for which the reconciliation is performed. You can choose a different G/L account or business partner. Reconciliation Currency Currency of the reconciliation. This depends on the currency defined for the selected G/L account or business partner. If the currency assigned to the selected G/L account or business partner is All Currencies, the local currency is displayed. The reconciliation is performed in the local currency. Print Balancing Transactions Enables you to print balancing transactions. Print Settings Opens the External Reconciliation Printing Preference window in which you can define your preferences for reconciliation printing. For more information, see Printing Reconciled and Unreconciled Transactions for Specific Business Partners or G/L Accounts. Table Area Transaction No. or Row In the left-side tables: displays the journal entry transaction number. To display the journal entry, click . In the right-side tables: displays the transaction row number in the Process External Bank Statement window. Posting Date or Date Transaction posting date. Ref. 1 In the left-side tables: displays the reference number as it appears in the Ref. 1 field for the transaction in the Journal Entry window. In the right-side tables: displays the reference number as it appears in the Reference field for the transaction in the Process External Bank Statement window. Amount Original amount posted in the specific row of the transaction. Details In the left-side tables: displays remarks as they appear in the Remarks field for the transaction in the Journal Entry window. In the right-side tables: displays details as they appear in the Details field for the transaction in the Process External Bank Statement window. 5. Select the transactions to be reconciled from both sides of the upper section. To move the selected transactions to the lower half of the window, double-click the selection transactions or click . In the lower tables, the values in the Amount columns are summed. The total of all selected transactions in each lower table is displayed at the bottom of the Amount column. In addition, the reconciliation difference is displayed to indicate whether the reconciliation is balanced or not. For every transaction you move to the lower tables, SAP Business One recalculates the reconciliation difference. 6. When all relevant transactions from both sides of the upper section are in the lower half of the window, choose the Reconcile button. © SAP AG 2010 43 SAP Business One 8.8 How to Work with Internal and External Reconciliations If the amounts for the reconciled transactions from both sides are not identical, the reconciliation is not balanced. A message notifies you of this situation and asks you if you want to create a balancing transaction: To create a balancing transaction, choose the OK button. The Journal Entry window appears with a row that represents the difference between the two transactions. Complete the journal entry. To create the journal entry and perform the reconciliation, choose the Add button. To cancel the reconciliation, choose the Cancel button. Result SAP Business One reconciles the selected transactions. Example See Performing Manual Reconciliation for External Bank Statements. Automatically Performing External Reconciliations You can perform automatic reconciliations when you need to reconcile a large number of transactions, or when you need to reconcile a range of business partners or G/L accounts. The process for automatically reconciling business partner transactions or G/L accounts is very similar. SAP Business One performs automatic reconciliations for pairs of transactions, and the reconciliation is done separately for each business partner or G/L account successively. If you allow automatic reconciliations with differences, SAP Business One posts any differences found to the automatic reconciliation difference account. NOTE If bank statement processing is activated in SAP Business One, you should perform external reconciliations directly within the bank statement processing functionality. You should not use the External Reconciliation window to reconcile transactions from your bank statements. For more information about external reconciliations in bank statement processing, see the online help for SAP Business One and How to Use Bank Statement Processing in Release 2007 in the documentation area of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. Prerequisites To perform automatic reconciliations with reconciliation differences, you have defined the automatic reconciliation differences account. For more information, see Preparing to Perform Automatic Reconciliations. © SAP AG 2010 44 SAP Business One 8.8 How to Work with Internal and External Reconciliations Procedure 1. From the SAP Business One Main Menu, choose Banking → Bank Statements and External Reconciliations → Reconciliation. The External Reconciliation - Selection Criteria window appears. 2. To specify whether to reconcile transactions of business partners or G/L accounts, from the Select Source dropdown list select Business Partner or G/L Account. 3. Select the Automatic radio button and specify the following information: Field Description From… To Range of business partners or G/L account codes you want to reconcile. This field is mandatory. Due Date To Displays by default the current date; specify a different due date if required. Transactions with a due date earlier or equal to the displayed date will be reconciled. Totals Only Enables the reconciliation of transactions with matched amounts and without consideration of any other factors. Totals with Restrictions Enables the reconciliation of transactions with matched amounts that also comply with additional conditions based on reference and date values. Reconciliation Difference Enables the reconciliation of transactions with nonidentical amounts. Specify the difference amount that should be considered when automatic reconciliation is performed. Differences found during reconciliation are posted to the automatic reconciliation difference account. 4. Choose the Reconcile button. Result SAP Business One reconciles the selected transactions according to the parameters you defined and then opens the External Reconciliation window. The transactions displayed in the upper tables are the ones created for the selected G/L accounts or business partners but could not be reconciled according to the parameters you defined in the selection criteria window. (Next To browse the unreconciled transactions for the selected G/L accounts or business partners, click (Previous Record). You can reconcile the relevant transactions manually. For more Record) and information, see Manually Performing External Reconciliations. © SAP AG 2010 45 SAP Business One 8.8 How to Work with Internal and External Reconciliations Semiautomatically Performing External Reconciliations You can perform semiautomatic reconciliations for business partner transactions and for G/L accounts. The reconciliation is done manually, based on recommendations provided by SAP Business One. The process for semiautomatically reconciling business partner transactions and semiautomatically reconciling G/L accounts is very similar. NOTE If bank statement processing is activated in SAP Business One, you should perform external reconciliations directly within the bank statement processing functionality. You should not use the External Reconciliation window to reconcile transactions from your bank statements. For more information about external reconciliations in bank statement processing, see the online help for SAP Business One and How to Use Bank Statement Processing in Release 2007 in the documentation area of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. 1. From the SAP Business One Main Menu, choose Banking → Bank Statements and External Reconciliations → Reconciliation. The External Reconciliation - Selection Criteria window appears. 2. To specify whether to reconcile transactions of a business partner or a G/L account, from the Select Source dropdown list select Business Partner or G/L Account. 3. Select the Semi-Automatic radio button and specify the selection criteria. The fields in this window are the same as those for a semiautomatic internal reconciliation. For more information about the selection criteria, see Semiautomatically Performing Internal Reconciliations. 4. To generate the reconciliation recommendations, choose the Reconcile button. © SAP AG 2010 46 SAP Business One 8.8 How to Work with Internal and External Reconciliations The Reconciliation window appears. In the Open Transactions in Books and the Open Transactions in External Statement tables, SAP Business One displays the list of transactions with unreconciled amounts greater than zero. 5. View the displayed information for each transaction: Field Description General Area BP or G/L Account G/L account or business partner code for which the reconciliation is performed. Reconciliation Currency Currency of the reconciliation. This depends on the currency defined for the selected G/L account or business partner. If the currency assigned to the selected G/L account or business partner is All Currencies, the local currency is displayed, and the reconciliation is performed in the local currency. Ignore Negative Amounts Prevents the display of recommendations for transactions with negative amounts. Table Area Trans. No. or Row On the left side: displays the journal entry transaction number. To display the journal entry, click . On the right side: displays the transaction row number in the Process External Bank Statement window. Posting Date or Due Date Posting date or due date of this transaction row, depending on which value you specified in the selection criteria window. Ref. 1 or Ref. 2 or Ref. 3 Reference On the left side: displays reference 1, 2, or 3, of the transaction row, depending on the reference specified in the selection criteria window. On the right side: displays the reference number as it appears in the Reference field for the transaction in the Process External Bank Statement window. Amount Amount posted in the specific row of the transaction. © SAP AG 2010 47 SAP Business One 8.8 How to Work with Internal and External Reconciliations NOTE To perform manual reconciliations not based on the recommendations, choose the Manual button. The External Reconciliation window appears. For more information, see Manually Performing External Reconciliations. 6. To see a list of recommended reconciliations, double-click a transaction row. The Reconciliation Recommendations window appears. SAP Business One displays the selected transaction and below it a separate list of reconciliation recommendations for the selected transaction, sorted in order of rank starting from the highest rank. The rank reflects the level of matching between the selected transaction and the proposed transactions. It is calculated according to the parameters and the priority weighting you specified in the External Reconciliation - Selection Criteria window. For more information, see Appendix: Rank Calculation in Reconciliation Recommendations. 7. To select a recommendation from the list of reconciliation recommendations, click once in the row of the desired recommendation. To perform the reconciliation, choose the Reconcile button. NOTE If you choose to reconcile transactions with an amount difference (based on the recommendations), the Journal Entry window appears. You must create the respective balancing transaction to complete the reconciliation. If you decide not to reconcile the transaction that appears at the top of the window and instead want to display the next transaction in the Reconciliation window, choose the Skip button. SAP Business One then displays the next transaction in the first row of the window. Result SAP Business One reconciles the selected transactions. Example See Performing Semiautomatic Internal or External Reconciliations. © SAP AG 2010 48 SAP Business One 8.8 How to Work with Internal and External Reconciliations Managing Previous External Reconciliations You can view the history of all external reconciliations performed for a specified range of business partners or G/L accounts. You can also cancel and re-create external reconciliations created for business partners or G/L accounts using the Manage Previous External Reconciliations window. NOTE If bank statement processing is activated in SAP Business One, bank transactions recorded in bank statement processing are not displayed in the Manage Previous External Reconciliations window. For more information about external reconciliations in bank statement processing, see the online help for SAP Business One and How to Use Bank Statement Processing in Release 2007 in the documentation area of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. Viewing External Reconciliation History Use this procedure to view external reconciliations that had been initiated previously by users, whether manually, automatically, or semiautomatically. 1. From the SAP Business One Main Menu, choose Banking → Bank Statements and External Reconciliations → Manage Previous External Reconciliations. The Manage Previous External Reconciliations - Selection Criteria window appears. 2. From the Previous Reconciliation for dropdown list, select to display previous reconciliations for business partners or for G/L accounts and specify the following selection criteria: Field Description/Activity G/L Acct/BP Code From… To Range of business partners or G/L accounts, depending on your selection in the Previous Reconciliation for field. Date From… To Range of dates to display reconciliations performed within this range. Reconciliation No. From… To Range of numbers identifying the reconciliations SAP Business One should display. 3. Choose the OK button. © SAP AG 2010 49 SAP Business One 8.8 How to Work with Internal and External Reconciliations The Manage Previous External Reconciliations window appears. The Manage Previous External Reconciliations window lists the previous external reconciliations that match the selection criteria you specified in the Manage Previous External Reconciliations - Selection Criteria window. This window contains three tables: The upper table contains previous reconciliations. The left-lower table lists the transactions in the books associated with the reconciliation selected in the upper table. The lower-right table lists the external statements associated with the reconciliation selected in the upper table. The upper table contains the following information: Field Description G/L Acct/BP Code Code of the G/L account or business partner for which the reconciliation was performed. Recon. No. Sequential reconciliation number assigned to the external reconciliation by SAP Business One when the reconciliation took place. Each business partner or G/L account has the same sequence of reconciliation numbers, starting from 1. Recon. Amount Total amount of the reconciliation. © SAP AG 2010 50 SAP Business One 8.8 How to Work with Internal and External Reconciliations Field Description Recon. Type Type of reconciliation: • Manual Reconciliation was performed manually: in the Reconciliation Bank Statement window, in the Process External Bank Statement window, or in the External Reconciliation - Selection Criteria window by selecting the Manual radio button. • By Total Reconciliation was performed by selecting the Automatic radio button in the External Reconciliation - Selection Criteria window without considering any other factors. Reconciliation was performed by selecting the SemiAutomatic radio button in the External Reconciliation Selection Criteria window and considering only the Amount parameter. • Due Date, Posting Date Reconciliation was performed by selecting either the Automatic or the Semi-Automatic option in the External Reconciliation - Selection Criteria window and considering either the due date or the posting date of the transactions. • Ref. 1, Ref. 2, Ref. 3 Reconciliation was performed by either selecting the Automatic or the Semi-Automatic radio button in the External Reconciliation Selection Criteria window and considering the reference 1, 2 or 3 of the transactions. In addition, the value in the Recon. Type field can be a combination of the due date or posting date and the reference number. EXAMPLE If you decide to consider Due Date and Ref. 3 in the selection criteria for the reconciliation, the value in the Recon. Type field is Ref. 3 + Due Date. Reconciliation Date Date on which the reconciliation was performed. However, if you perform external reconciliation using bank statement processing, the field displays the due date from the bank statement line. Creation Date Date on which the reconciliation was performed. The lower tables contain similar information as in the table area of the External Reconciliation window. For more information, see step 4 in Manually Performing External Reconciliations. NOTE In the lower tables, a row marked as bold indicates a balancing transaction. 4. From the Display Data For dropdown list, choose whether to display all the reconciliations in the defined range or reconciliations performed for a specific G/L account or business partner. 5. To select a reconciliation in the upper table, click the relevant row. The transactions associated with the selected reconciliation are displayed in the lower tables. Canceling Previous External Reconciliations Use this procedure to cancel external reconciliations that had been initiated previously by users, whether manually, automatically, or semiautomatically. © SAP AG 2010 51 SAP Business One 8.8 How to Work with Internal and External Reconciliations 1. From the SAP Business One Main Menu, choose Banking → Bank Statements and External Reconciliations → Manage Previous External Reconciliations. 2. In the Manage Previous External Reconciliations - Selection Criteria window, select to display previous reconciliations for business partners or for G/L accounts. Specify the selection criteria and choose the OK button. For more information, see Viewing External Reconciliation History. 3. In the upper table in the Manage Previous External Reconciliations window, select one or more reconciliations to cancel and choose the Cancel Reconciliation button. Result As a result of the cancellation: • Only the reconciliation serving as the link between the relevant transactions is opened. • The status of the involved documents (if there are any) is not changed from Closed to Open. • The Balance Due field is not updated. • If balancing transactions or automatic exchange-rate transactions are involved in the canceled reconciliation, they are not reversed. Re-creating Previous External Reconciliations After you have performed manual or semiautomatic external reconciliations, and even after automatic external reconciliations, you may discover that there is an incorrect match between transactions. To address this situation, you can re-create previous external reconciliations. NOTE For certain localizations, you cannot re-create reconciliations created in the Reconciliation Bank Statement window. For more information, see Manually Reconciling Bank Statements: ANZ, BR, CA, CN, CY, IN, JP, KO, SG, UK, US, and ZA. 1. From the SAP Business One Main Menu, choose Banking → Bank Statements and External Reconciliations → Manage Previous External Reconciliations. 2. In the Manage Previous External Reconciliations - Selection Criteria window, select to display previous reconciliations for business partners or for G/L accounts. Specify the selection criteria and choose the OK button. For more information, see Viewing External Reconciliation History. 3. In the upper table in the Manage Previous External Reconciliations window, select the relevant reconciliation you want to re-create and choose the Redo button. A system message appears. 4. Choose Continue. Result SAP Business One cancels the selected the reconciliation, opens the External Reconciliation window, and displays the relevant transactions to be reconciled again. You can then make the necessary changes and reconcile the transaction. For more information, see Manually Performing External Reconciliations. Checking and Restoring Previous External Reconciliations You can display and cancel only incorrect external reconciliations or all the external reconciliations initiated by users and by SAP Business One for a specific G/L account or business partner. Incorrect external reconciliations are rare cases of reconciliations where the amounts on the debit and on the credit side do not match. NOTE © SAP AG 2010 This action cannot be reversed. If bank statement processing is activated in SAP Business One, bank transactions recorded in bank statement processing are not displayed in the Check and Restore Previous External Reconciliations window. For more information about external reconciliations in bank statement processing, see the online help for SAP Business One and How to Use Bank Statement Processing in Release 2007 in the documentation area 52 SAP Business One 8.8 How to Work with Internal and External Reconciliations of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. 1. From the SAP Business One Main Menu, choose Banking → Bank Statements and External Reconciliations → Check and Restore Previous External Reconciliations. The Check and Restore Previous External Reconciliations window appears. 2. Specify the following information: Field/Button Description/Activity G/L Account or BP From the dropdown list, select whether to display reconciliations created for G/L accounts or for business partners. G/L Acct/BP Code Specify the code of the G/L account or business partner for which you want to display previous reconciliations. Recon. From … To Specify a range of reconciliation numbers for displaying reconciliations. The default range is -999999 to 999999. The reconciliations initiated automatically by SAP Business One are assigned negative numbers. Positive numbers are assigned to reconciliations initiated by users. Display Incorrect Reconciliations Only Enables display of only incorrect reconciliations. Incorrect external reconciliations are displayed in red. Display Incorrect Entries Starting from Specify the value that SAP Business One uses to display incorrect entries with a difference higher than the specified value. 3. Choose the Execute button. Reconciliations for the selected account or partner are displayed in the table. View the following information: Field Description Recon. Reconciliation number. Trans. No. Transaction number of the reconciled transaction. © SAP AG 2010 53 SAP Business One 8.8 How to Work with Internal and External Reconciliations Field Description Row Row number of each transaction in the reconciliation. Amount in Books Reconciled amount for each transaction as it appears on the books side. Credit/Debit Acct Side of each transaction in the reconciliation: C = credit, D = debit. Row in Bank Row number of the transaction in the bank statement. Amount in Bank Reconciled amount in the bank statement. Bank Credit/Debit Side of each transaction from the bank statement in the reconciliation: C = credit, D = debit. Ref. 1 First reference of the reconciled transaction. Posting Date, Due Date Posting date and due date of the reconciled transaction. 4. To cancel all reconciliations displayed in the table, choose the Open All button. To cancel only incorrect reconciliations, choose the Open Incorrect Only button. CAUTION Once you choose the Open All button or the Open Incorrect Only button, you cannot undo the cancellation. Printing External Reconciliations You can print both reconciled and unreconciled transactions for selected business partners or for G/L accounts, or print selected previous external reconciliations. Printing Reconciled and Unreconciled Transactions for Specific Business Partners or G/L Accounts 1. From the SAP Business One Main Menu, choose Banking → Bank Statements and External Reconciliations → Reconciliation. 2. In the External Reconciliation - Selection Criteria window, from the Select Source dropdown list select Business Partner or G/L Account, select either the Manual or Automatic reconciliation type, and specify selection criteria. Then choose the Reconcile button. For more information, see Manually Performing External Reconciliations and Automatically Performing External Reconciliations. 3. In the External Reconciliation window, choose the Print Settings button. © SAP AG 2010 54 SAP Business One 8.8 How to Work with Internal and External Reconciliations The External Reconciliation Printing Preferences window appears. 4. Specify the following: To print reconciliations, select the Print Reconciliations checkbox. When you select this option, the following options appear: New Reconciliations Only Prints only the reconciliation that SAP Business One is about to perform. New and Old Reconciliations Prints reconciliations that were created in the past as well as the ones that SAP Business One is about to perform. When you select this option, additional fields appear that enable you to specify the reconciliation number range. To print unreconciled transactions, select the Unreconciled Transactions checkbox. When you select this option, the Sorting 1 and Sorting 2 fields appear. Use these fields to define the sorting order of the unreconciled transactions for the purpose of printing. You can sort by Transaction No., by Due Date or by Ref. 1. To include detailed totals related to the external reconciliations in the printed information, select the Detailed Totals for External Reconciliations checkbox. 5. To save your changes, choose the Update button. 6. From the Tools menu, choose Print Layout Designer… or click 7. Choose the preferred printing template. 8. Print the document. in the toolbar. NOTE You can edit the default templates or create new ones by using Print Layout Designer (PLD). For more information, see How to Customize Printing Templates with Print Layout Designer in the documentation area of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. Printing Previous External Reconciliations 1. Open the Manage Previous External Reconciliations - Selection Criteria window. For more information, see Viewing External Reconciliation History. 2. From the Previous Reconciliation for dropdown list, select to display previous reconciliations for business partners or for G/L accounts and specify the selection criteria. Choose the OK button. 3. In the upper table in the Manage Previous External Reconciliations window, select the reconciliations you want to print. 4. From the Tools menu, choose Print Layout Designer… or click © SAP AG 2010 in the toolbar. 55 SAP Business One 8.8 How to Work with Internal and External Reconciliations 5. Choose the preferred printing template. 6. Print the document. NOTE You can edit the default templates or create new ones by using Print Layout Designer (PLD). For more information, see How to Customize Printing Templates with Print Layout Designer in the documentation area of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. Importing External Bank Statement: Israel and Panama For Israel and Panama localizations, you can import an external bank statement from electronic files provided by the bank. This function saves you the time required to manually enter this information. 1. From the SAP Business One Main Menu, choose Banking → Bank Statements and External Reconciliations → Process External Bank Statement. The Process External Bank Statement window appears. 2. To record transactions from a bank statement, from the G/L Account dropdown list select G/L Account. Specify the code of the G/L account for which you want to record the statement and choose the Import from File button. NOTE If you record transactions from business partner statements, you cannot use the Import from File function. © SAP AG 2010 56 SAP Business One 8.8 How to Work with Internal and External Reconciliations The Import External Bank Statement window appears. The Current Balance displays the current balance of the selected account as it appears in the Current Balance field in the last row of the G/L account in the Process External Bank Statement window. 3. From the Bank Format dropdown list, select the relevant file format of the electronic file provided by the bank. To search for the file on your computer, choose the Browse button. SAP Business One displays the path for the selected file in the Data File field. After you select a file, the table displays the information stored in the file: Field Description Date Date on which the transaction was recorded at the bank. Ref., Details, Value Other relevant data as recorded in the file received from the bank. Credit, Debit Amount according to the bank statement. Balance Cumulative balance of the account. Projected Balance Account balance as calculated by SAP Business One as if the transactions had been recorded in the SAP Business One database. 4. To add the data displayed in the table into the Process External Bank Statement window, choose the Read button. Manually Reconciling Bank Statements: ANZ, BR, CA, CN, CY, IN, JP, KO, SG, UK, US, and ZA For the following localizations, you can verify the transactions recorded in SAP Business One against the balance received from the bank and create adjustments if required: Australia, Brazil, Canada, China, Cyprus, India, Japan, Korea, New Zealand, Singapore, South Africa, United Kingdom, and United States. RECOMMENDATION The function for manually creating external reconciliations (see Manually Performing External Reconciliations) creates reconciled records in the Process External Bank Statement window. Therefore, to avoid duplicate reconciliations, we recommend that you do not use the Process © SAP AG 2010 57 SAP Business One 8.8 How to Work with Internal and External Reconciliations External Bank Statement window to record your bank statement when working using the localized method described here. NOTE If bank statement processing is activated in SAP Business One, you cannot use the Manual Reconciliation function to reconcile transactions from your bank statements. For more information about external reconciliations in bank statement processing, see the online help for SAP Business One and How to Use Bank Statement Processing in Release 2007 in the documentation area of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. Procedure 1. From the SAP Business One Main Menu, choose Banking → Bank Statements and External Reconciliations → Manual Reconciliation. The External Bank Reconciliation - Selection Criteria window appears. 2. In the Account Code field, select an account code. As a result, Account Name and Currency are displayed automatically in the respective fields. If the account currency is defined as All-Currencies, the local currency is displayed and is the reconciliation currency. In addition, the Last Balance field automatically displays the updated balance from the previous reconciliation. You cannot edit the Currency and the Last Balance fields. In the Ending Balance field, specify the current balance received from the bank; in the End Date field specify the date to which the current balance is updated. 3. Choose the OK button. © SAP AG 2010 58 SAP Business One 8.8 How to Work with Internal and External Reconciliations The Reconciliation Bank Statement window appears. SAP Business One displays all the open deposits and payments in which the selected account is involved. View and specify the following information: Field/Button Description/Activity General Area Account Code Displays the account code selected in the External Bank Reconciliation Selection Criteria window. Display Determines what transactions are displayed. Select one of the following display options: Find • All – both cleared and uncleared transactions • Cleared – only cleared transactions • Uncleared – only uncleared transactions Enables you to find a specific transaction in a sorted column. For example, to find a transaction according to its number, sort the Trans. No. column. Then in the Find field specify the relevant number. SAP Business One highlights the first transaction that matches the value specified. NOTE By default, the Date column is sorted. © SAP AG 2010 59 SAP Business One 8.8 How to Work with Internal and External Reconciliations Field/Button Description/Activity Statement No. Specify the number of the statement you received. This number is unique for each account. This means you can assign the same number to statements created for different accounts; however, you can assign the same number only to one statement in each account. You can create a statement without a number. NOTE If a reconciliation is canceled, its statement number becomes available again and can be used for a new reconciliation. For more information, see Canceling Previous External Reconciliations. Last Statement Balance Displays the balance of the previous statement. Payment, Deposit The Total No. field displays the total number of selected transactions on the debit side (Payment) and on the credit side (Deposit). The Total Amount field displays the cumulative debit amount and credit amount. Cleared Book Balance Displays the total cleared amount, considering the selected transactions. Statement Ending Balance Displays the value specified in the Ending Balance field in the External Bank Reconciliation - Selection Criteria window. Difference Displays the difference between the Cleared Book Balance and the Statement Ending Balance. This value depends on the selected transactions. Save Saves the current reconciliation so that you can continue working on it later. The next time you choose the same account in the External Bank Reconciliation - Selection Criteria window, the Reconciliation Bank Statement window displays the saved selection. Adjustments Enables you to create any required bank adjustments by opening the Adjustments window. For more information, see Creating Adjustments: ANZ, BR, CA, CN, CY, IN, JP, KO, SG, UK, US, and ZA. Table Area Cleared Indicates that the transaction has been cleared. Type Displays the transaction type: • PS represents payments, that is, transactions in which the selected account is credited. • DP represents deposits, that is, transactions in which the selected account is debited. Date Displays the posting date of the transactions. Trans No. Displays the number of the transaction and provides a link to the journal entry. Reference Number Displays the reference number as it appears in the Ref. 1 field for the transaction in the Journal Entry window. Payment Displays the amount on the debit side in the transaction. Deposit Displays the amount on the credit side in the transaction. Cleared Amount Displays the amount in the Payment/Deposit column after you select the transaction. © SAP AG 2010 60 SAP Business One 8.8 How to Work with Internal and External Reconciliations 4. Select the transactions to be cleared. When you select a transaction, SAP Business One recalculates the value in the Difference field. Reconciliation is performed only if the difference equals zero. 5. If the value in the Difference field is not zero, do one of the following: Create an adjustment. For more information, see Creating Adjustments: ANZ, BR, CA, CN, CY, IN, JP, KO, SG, UK, US, and ZA. Save your selection for future processing. Choose the Save button. The next time you choose the same account in the External Bank Reconciliation - Selection Criteria window, the Reconciliation Bank Statement window will display the saved selection 6. To perform the reconciliation, choose the Reconcile button. NOTE You cannot re-create reconciliations created in the Reconciliation Bank Statement window. Result SAP Business One reconciles the selected transactions and sets the reconciliation type for this reconciliation to Manual. Example See Performing Manual Reconciliation for External Bank Statements: ANZ, BR, CA, CN, CY, IN, JP, KO, SG, UK, US, and ZA. Creating Adjustments: ANZ, BR, CA, CN, CY, IN, JP, KO, SG, UK, US, and ZA For the following localizations, to reflect transactions that are already in the bank statement but are not yet posted in SAP Business One, you can create a balancing transaction or document: Australia, Brazil, Canada, China, Cyprus, India, Japan, Korea, New Zealand, Singapore, South Africa, United Kingdom, and United States. After the required adjustment is made, the difference between the ending balance in the bank statement and the account balance in the books equals zero, and the selected transactions can be reconciled. 1. From the SAP Business One Main Menu, choose Banking → Bank Statements and External Reconciliations → Manual Reconciliation. 2. In the External Bank Reconciliation - Selection Criteria window, specify the relevant account information and choose the OK button. 3. In the Reconciliation Bank Statement window, make the required selections and choose the Adjustments button. © SAP AG 2010 61 SAP Business One 8.8 How to Work with Internal and External Reconciliations The Adjustments window appears. 4. Select one of the following types of transactions you want to create and choose the OK button: Journal Entries Incoming Payment Outgoing Payment Checks for Payment Deposit The window of the selected transaction type appears. 5. Create the required transaction and choose the Add button. As a result, the created transaction is added to the table in the Reconciliation Bank Statement window, and it is also selected. The value in the Difference field is updated accordingly. 6. To perform the reconciliation, choose the Reconcile button. © SAP AG 2010 62 SAP Business One 8.8 How to Work with Internal and External Reconciliations Examples for Performing Internal and External Reconciliations Performing Partial Manual Reconciliation for Business Partner Transactions The following open documents exist for a customer: Document Document Number Posting Date Balance Due Amount Invoice 73 September 1, 2009 300 Payment 25 October 1, 2009 (100) Payment 27 October 30, 2009 (150) Payment 28 November 16, 2009 (60) NOTE If the Display Credit Balance in Negative Sign checkbox is selected on the Basic Initialization tab in the Company Details window, a positive amount in the Balance Due (LC) indicates a debit balance while a negative amount indicates a credit balance. To manually reconcile those open transactions, in the Internal Reconciliation window, you select the invoice and the payments rows. However, the amounts do not match, and there is a reconciliation difference of -10. You manually adjust the value in the Amount to Reconcile field of Payment 28 to 50. SAP Business One recalculates the reconciliation difference, which is now zero, enabling you to complete the reconciliation. After you reconcile the transactions, SAP Business One closes the fully reconciled transactions: Invoice 73 and Payments 25 and 27. For the partially reconciled transaction, Payment 28, the balance due is updated to 10 = 60 minus 50. Performing Manual Reconciliation for Business Partner Transactions Using Cash Discount You selected an invoice balance due of 100 and a payment of 63.There is a 10% cash discount associated with the invoice. If you manually adjust the value in the Amount to Reconcile field to 70, on selection of a payment the following fields in the invoice row are updated as follows: © SAP AG 2010 63 SAP Business One 8.8 • How to Work with Internal and External Reconciliations Cash Discount Amount: 7 • Amount to Reconcile: 63 After selecting a payment, you manually adjust the Amount to Reconcile field in the invoice row to 63. The cash discount amount is calculated as follows: [63 / (100 minus 10) X 100] minus 63 = 7. Performing Manual Reconciliation Across Multiple Business Partners You manually reconciled the following transactions for customer X and vendor Y, which are the same business partner: Document Document Number Posting Date Balance Due Amount A/R invoice 56 October 29, 2009 150 A/P invoice 19 May 26, 2009 (150) As a result, SAP Business One creates a journal reconciliation as the following journal entry: G/L Account/Business Partner Debit Customer X Vendor Y © SAP AG 2010 Credit 150 150 64 SAP Business One 8.8 How to Work with Internal and External Reconciliations This journal entry, marked by JR in the Origin field, appears in the Reconciliation Details for this reconciliation. Performing Manual Reconciliation for G/L Accounts Using an Adjustment The following open transactions exist for the allocation account: Transaction Number Posting Date Debit Amount Credit Amount 877 September 20, 2009 200 887 October 10, 2009 50 898 October 30, 2009 50 909 November 5, 2009 50 930 November 16, 2009 55 You tried to manually reconcile those open transactions. In the Internal Reconciliation window you selected all the open transactions rows. However, the amounts do not match, due to a reconciliation difference of -5 caused by the incorrect posting of transaction 930. © SAP AG 2010 65 SAP Business One 8.8 How to Work with Internal and External Reconciliations You create a manual journal entry as an adjustment, debiting the allocation account by 5. After you reconcile the transactions, SAP Business One closes the fully reconciled transactions and updates the balance of the allocation account. Performing Semiautomatic Internal or External Reconciliations The following example is relevant for both semiautomatic internal and external reconciliations. The following open documents exist for a customer: Document Transaction Number Posting Date Balance Due Amount Invoice 905 September 1, 2009 100 Payment 906 September 1, 2009 100 Payment 907 September 15, 2009 50 Payment 908 October 5, 2009 50 Payment 909 October 30, 2009 100 NOTE If the payments were recorded as incoming payments, you need to perform semiautomatic internal reconciliation. If the payments were recorded as transactions from external statements of the customer, you need to perform semiautomatic external reconciliation. To perform semiautomatic internal reconciliation, you prioritize the following parameters to be considered when SAP Business One generates reconciliation recommendations for the reconciliation: Parameter Priority Weighting Max. Deviation Amount High 50 Posting Date High 30 Ref. 1 Skip © SAP AG 2010 66 SAP Business One 8.8 How to Work with Internal and External Reconciliations SAP Business One displays the following Reconciliation Recommendations for the invoice: For the three recommendations displayed, the payment with transaction number 906 is recommended as the best match: Its balance due does not deviate from the invoice balance due, and its posting date does not deviate as well. NOTE Payments with transaction number 908 and 909 do not appear in the recommendations since their posting date deviates by more than 30 days from the posting date of the invoice. For more information, see Appendix: Rank Calculation in Reconciliation Recommendations. Canceling Previous Internal Reconciliation You have manually reconciled invoice 18 (transaction 71) with payment 11 (transaction 73). SAP Business One created reconciliation number 24 and also created a journal entry (transaction 75) to reflect the cash discount of GBP 10 to which the customer is entitled. For more information, see Manually Reconciling Business Partner Transactions with Cash Discount. When you canceled the reconciliation, reconciliation number 29 was created to cancel reconciliation number 24. © SAP AG 2010 67 SAP Business One 8.8 How to Work with Internal and External Reconciliations In addition, reconciliation number 30 was created as a reversal reconciliation, in which SAP Business One created a reversal transaction, transaction number 85, to balance the original cash discount transaction, transaction number 75. © SAP AG 2010 68 SAP Business One 8.8 How to Work with Internal and External Reconciliations Performing Manual Reconciliation for External Bank Statements On November 1, 2009, you created a deposit document of 1000. On November 16, 2009, you received the following bank statement: Date Details Debit/Credit Amount Current Balance November 1, 2009 Deposit 1000 1500.00 November 1, 2009 Fee (1.99) 1498.01 After you record the bank statement in the Process External Bank Statement window, you decide to manually reconcile those transactions for your bank account. In the External Reconciliation window you select the deposit transaction in your books and the deposit transaction recorded in your bank. You move those transactions to the lower section of the window and reconcile them. The transaction referring to the fee remains unreconciled, because it is not documented in your books. Therefore, you select it. When you choose the Reconcile button, you create a manual journal entry to balance this transaction. Performing Manual Reconciliation for External Bank Statements: ANZ, BR, CA, CN, CY, IN, JP, KO, SG, UK, US, and ZA On December 1, 2009, you decide to perform a reconciliation for your bank account. The last balance of this account was 100, and the ending balance of this bank account for this date is 250. The Reconciliation Bank Statement window displays 2 deposits that you can clear: Date Transaction Number Deposit Amount November 10, 2009 927 45 November 24, 2009 929 100 © SAP AG 2010 69 SAP Business One 8.8 How to Work with Internal and External Reconciliations You need to reconcile transactions in order to match the value of the cleared book balance to the ending balance of this bank account. In this case, you need to reconcile transactions with a total amount of 150 = 250 minus 100. You select both transactions, but the total amount of the open transactions is 145 = 45 + 100. You create a manual journal entry as an adjustment, debiting the bank account by the amount of 5. As a result, an additional row is added to the list of transactions you want to clear. The difference between the cleared book balance and the statement ending balance is now zero, enabling you to complete the reconciliation. © SAP AG 2010 70 SAP Business One 8.8 How to Work with Internal and External Reconciliations Authorizations For more information about the authorizations required for working with internal and external reconciliations, see the online help for SAP Business One and How to Define Authorizations in the documentation area of SAP Business One Customer Portal at http://service.sap.com/smb/sbocustomer/documentation. Database Tables Reference For information about the tables used in reconciliations, see the .chm file Database Tables Reference. To download the Database Tables Reference .chm file from SAP Community Network: 1. Go to https://www.sdn.sap.com/irj/sdn/businessone. 2. Under BUSINESS ONE KNOWLEDGE CENTER, click the link of the SAP Business One release you need. 3. Click the SDK Help Center link. 4. In the File Download window, do one of the following: To open the .zip file, choose the Open button; then extract the REFDB.chm file to your computer. To save the .zip file to your computer, choose the Save button. You can open the .zip file and extract the REFDB.chm file later. © SAP AG 2010 71 SAP Business One 8.8 How to Work with Internal and External Reconciliations Appendix: Rank Calculation in Reconciliation Recommendations When you perform semiautomatic internal or external reconciliation, SAP Business One provides you with ranked recommendations for reconciliations, which you perform manually. The rank calculation for each recommendation is comprised of the summary of the rank for the three parameters: the amount, the date, and the reference. The priority weighting and the maximum deviation you specify for each parameter in the selection criteria for the internal and external reconciliation determine how the ranking is calculated. Specifying the priority determines the maximum rank for a parameter: Priority Weighting Value High 45 Medium 35 Low 20 Skip 0 The rank for each parameter is calculated using the following formula: Parameter Formula Comments Amount Priority Weighting – (absolute amount difference / Max. Deviation) X Priority Weighting If Max. Deviation is zero, the parameter rank is the Priority Weighting value if both transactions have the same amounts; otherwise it is zero. Date Priority Weighting – (absolute date difference in days / Max. Deviation)X Priority Weighting If Max. Deviation is zero, the parameter rank is the Priority Weighting value if both transactions have the same date; otherwise it is zero. Reference Priority Weighting Rank is zero if the transactions do not have the same reference number. NOTE The result of [amount/date difference / Max. Deviation X Priority Weighting] is rounded down to the nearest whole number. If SAP Business One recommends reconciling a few transactions together, the calculation of the amount rank is based on the summary of the amounts of those transactions. The calculation of the date rank is based on the summary of the transactions’ date rank. The total rank for a recommended reconciliation is calculated as follows: Rank = amount rank + date rank + reference rank © SAP AG 2010 72 SAP Business One 8.8 How to Work with Internal and External Reconciliations Example You prioritized the parameters as follows: Parameter Priority Weighting Max. Deviation Amount High 50 Posting Date Medium 30 Reference 1 Skip Not applicable You want to reconcile the following transaction: Transaction Number Posting Date Ref. 1 Balance Due 100 October 5, 2009 54 50 SAP Business One displays the following ranked recommendations: Rank Transaction Number Posting Date Ref. 1 Balance Due 72 304 305 October 15, 2009 October 29, 2009 10 22 20 35 55 306 304 November 1, 2009 October 15, 2009 9 10 50 20 49 306 November 1, 2009 9 50 42 304 October 15, 2009 10 20 39 305 October 29, 2009 22 35 The following table details the calculations for the rank of each of the recommendations: Transaction Numbers Amount Rank Date Rank Rank 304 45 – |20 – 50| / 50 X 45 = 45 – 27 = 18 35 – 10 / 30 X 35 = 35 – 11 = 24 18 + 24 = 42 305 45 – |35 – 50| / 50 X 45 = 45 – 13 = 32 35 – 24 / 30 X 35 = 35 – 28 = 7 32 + 7 = 39 306 45 – |50 – 50| / 50 X 45 = 45 – 0 = 45 35 – 27 / 30 X 35 = 35 – 31 = 4 45 + 4 = 49 304, 305 45 – |20+35 – 50| / 50 X 45 = 45 – 4 = 41 24 + 7 = 31 41 + 31 = 72 304, 306 45 – |50+20 – 50| / 50 X 45 = 45 – 18 = 27 24 + 4 = 28 27 + 28 = 55 NOTE The combination of transactions 305 and 306 is not included in the recommendations since their balance due, which is 85, deviates from the balance due of transaction 100 by more than 30, which is the value of the maximum deviation. © SAP AG 2010 73 SAP Business One 8.8 How to Work with Internal and External Reconciliations Copyrights, Trademarks, and Disclaimers © Copyright 2010 SAP AG. All rights reserved. The current version of the copyrights, trademarks, and disclaimers at http://service.sap.com/smb/sbocustomer/documentation is valid for this document. © SAP AG 2010 74
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