Thursday, July 1, 2010

What is Reconciliation Account

The Issue
What is significance of reconciliation account? Why it is important? and how does it helps MM/ FI person?

The Solution
I am not a finance user, but let me try to explain it in a language where both of us can understand.

You know there are many Vendor codes in the Vendor Master right?
So now, if you would like to include the balances of each vendor to the Balance sheet, what do you do?
Do you include all these vendor "codes" into the balance sheet?

No you cant do that, it will make your Balance Sheet have 100 pages.
This is why we have a Recon Account.. where it shows the balances for each vendor according to the Vendor Account Group. These balances according to account group will then be brought into the Balance Sheet.

Source: http://forums.sdn.sap.com/thread.jspa?threadID=1650592&messageID=8938481#8938481

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