| # The reconciliation process Two financial analysis and reconciliation processes can be distinguished: The general financial analysis of all reconciliation areas. The reconciliation and financial analysis of the Goods Received not Invoiced (GRNI), which is represented by the reconciliation area Invoice Accrual 3. Refer to The GRNI reconciliation process. You can perform financial analysis and reconciliation by reconciliation group. The Financial analysis and reconciliation process consists of the following steps: Close the financial period so that no new transactions can be entered. Calculate and post currency differences and rounding differences. Print the trial balance. If required, create an opening balance for reconciliation Print the reconciliation data. Compare the reports. Rebuild the ledger account history as necessary and regenerate the reports. Accept the reconciliation transactions that can be balanced. Analyze the data. Display the transaction details Create the required correction transactions. Post the correction transactions. Accept the reconciliation data. Detailed instructions for these steps are given below. The reconciliation process Step 1. Close periods Usually, reconciliation is performed over a specific fiscal period. Before you start the reconciliation process, use the Close Periods (tfgld1206m000) session to close the Integration period so that no new transactions can be entered. However, if you generate and print the reconciliation reports, LN does not check the period status. You can print the reports whenever you wish, independent of the period status. Step 2. Post currency differences To calculate the currency differences caused by rounding errors and by fluctuations of the currency rates and to post them to the appropriate ledger accounts before you perform the reconciliation process, you can run the following sessions: Calculate Currency Differences for Integration Accounts (tfgld4295m400) Calculate Rounding Currency Differences for Integration Accounts (tfgld4295m500) Finalize the batches for the currency differences transactions. For details, refer to Currency differences accounts. Step 3. Print the trial balance Use the Print Trial Balance (tfgld3402m000) session to print the trial balance for the integration ledger accounts that you want to analyse. Step 4. If required, create an opening balance for reconciliation If you have archived transactions that still contribute to the reconciliation group, for example, Inventory transactions, you can create opening balances to clear the differences in the reconciliation data. Use the Opening Balances for Reconciliation (tfgld4195m000) session. To create opening balances for specific business objects and reconciliation elements, you can select a transaction in the Operations Management - Financial Reconciliation (tfgld4595m000) session and on the appropriate menu, click Create Reconciliation Opening Balance. Step 5. Print the reconciliation data Use the Print Reconciliation Data (tfgld4495m000) or the Print Reconciliation Data PCS Work In Process (tfgld4495m300) session to print a reconciliation report. You must select a reconciliation group. At this stage in the process, you can print a standard report. Print the subtotals on a high level, for example, by reconciliation element, and select the following check boxes: Print Full Specification Suppress Zero Balances To print the subtotals on reconciliation element level, select the Group by Reconciliation Element or the Group by Recon. Element Combination check box. For more details about how to print the reconciliation reports, refer to To print the reconciliation reports. Step 6. Compare the trial balance and the balances on the reconciliation data report For the ledger accounts on which the amounts match, you can accept the reconciliation data. Continue at Step 8 Accept the reconciliation data. Step 7. Rebuild the History If the amounts on the reconciliation report do not correspond with the amounts on the trial balance, you can first rebuild the History of the ledger accounts that you are analyzing. Use the Rebuild Opening Balance/History from Transactions (tfgld3203m000) session and select all three check boxes: Opening Balance Rebuild Parent Account History Rebuild Parent Dimension History Go back to Step 4 Print the trial balance. Step 8. Accept the reconciliation data Accept the reconciliation data for the ledger accounts for which there are no problems. In the Accept Reconciliation Data (tfgld4295m000) session, select the reconciliation group. Then select the range of ledger accounts for which you want to accept the reconciliation data. Note Inventory accounts and end accounts must first be analyzed before you can accept the reconciliation data. Step 9. Analyze the balances on the reconciliation data report If the amounts on the reconciliation report do not correspond with the amounts on the trial balance, you can take various actions, depending on the type of problem and your auditing requirements. Use the Print Reconciliation Data (tfgld4495m000) session to print a report of the transactions that could not be reconciled. At this stage, you can clear the Print Full Specification check box because the relation between the reconciliation data and the trial balance has already been examined. If you wish, and for accounts other than Inventory accounts and end accounts, you can select the Print Only Non-accepted check box. Start by printing a report with not much detail. For more details about how to print the reconciliation reports, refer to To print the reconciliation reports. If the differences cannot be easily explained, in the Print Reconciliation Data (tfgld4495m000) session you can select the following check boxes to print a more detailed report: Logistic Details Financial Details Step 10. Display the transaction details In the Operations Management - Financial Reconciliation (tfgld4595m000) session, use the various options to display the transaction details. For example, if you select a line, on the appropriate menu you can click Transaction Origin to display the original transaction in Operations Management, and you can click Integration Transaction to display the mapping details and posting details of the transaction. For reference, you can also print the corresponding reports of the logistic data in Operations Management. If you are satisfied that the financial data is correct, continue at Step 13 Accept the Reconciliation Data. Step 11. Make corrections You can manually create the corrective transactions for postings that are incorrect. For details, refer to To create a correction transaction. This type of corrections solves the discrepancies in Financials. They do not solve the differences between the trial balance and the reconciliation report. Such differences must be sorted out by an expert. Next, repeat the reconciliation process, starting at Step 9: Analyze the balances on the reconciliation data report. You can print a reconciliation report that includes the non-posted corrections. Step 12. Post Reconciliation Corrections Use the Post Reconciliation Corrections (tfgld4295m300) session to post the correction transactions to the general ledger accounts. Next, go back to Step 3, Print the trial balance. Step 13. Accept the reconciliation data If no more corrections are required for the reconciliation group, in the Accept Reconciliation Data (tfgld4295m000) session, select the reconciliation group. Then select the range of ledger accounts for which you want to accept the reconciliation data. If you wish, you can select the Select Specific Business Object check box to accept the reconciliation data for a specific business object or range of business objects. You can select the Only Debit and Credit Balanced check box to accept most of the transactions. You must enter the tolerance amounts in each of the home currencies. When you click Process, LN checks a number of conditions and sets the status of the transactions that meet the conditions to Accepted. In the Operations Management - Financial Reconciliation (tfgld4595m000) session, you can view the transaction status and you can clear the Accepted check box if required. If you have performed the reconciliation process for a number of reconciliation groups, you can finalize the process and prepare the reconciliation data for deletion. For details, refer to To complete the reconciliation process Related topics To print the reconciliation reports Reconciliation - overview Reconciliation corrections To create a correction transaction The GRNI reconciliation process To complete the reconciliation process |