Quick Answer: What Is GL Reconciliation In SAP?

What is reconciliation process?

Reconciliation is an accounting process that compares two sets of records to check that figures are correct and in agreement.

Account reconciliation is particularly useful for explaining the difference between two financial records or account balances..

What is bank reconciliation and steps of bank reconciliation?

A bank reconciliation is the process of matching the balances in an entity’s accounting records for a cash account to the corresponding information on a bank statement. … A bank reconciliation should be completed at regular intervals for all bank accounts, to ensure that a company’s cash records are correct.

What is 3 way reconciliation?

Three Balances, All Equal You compare the latest bank statement (the “bank balance”) to your check register (the “book balance”), correcting for checks or deposits that have not cleared yet. If you and the bank show the same balance, then you are fine.

What are the types of reconciliation?

Types of reconciliationBank reconciliation. … Vendor reconciliation. … Customer reconciliation.Intercompany reconciliation. … Business specific reconciliation. … Accurate annual accounts must be maintained by all businesses. … Maintain good relationships with suppliers. … Avoid late payments and penalties from banks.More items…

What is GL and sub GL?

The GL is a set of master accounts, and transactions are recorded, and SL is an intermediary set of accounts linked to the general ledger. GL contains all debit and credit entries of transactions, and entry for the same is done. … Sub-ledger is a detailed subset of accounts that contains transaction information.

What is General Ledger experience?

General ledger experience involves using bank documents, payroll reports, sales receipts and invoices to update the general ledger.

What is GL reconciliation?

General Ledger Reconciliation is the process performed by accountants to verify the integrity of account balances on the company’s general ledger of accounts.

What is the use of vendor reconciliation account in SAP?

These reconciliation accounts ensure that the balance of G/L accounts is always zero. This means that you can draw up balance sheets at any time without having to transfer totals from the subledgers to the general ledger. You have to specify a reconciliation account in every vendor master record.

How do you use GL reconciliation in SAP?

Features. When you post items to a subsidiary ledger, the SAP system automatically posts the same data to the general ledger at the same time. Each subsidiary ledger has one or more reconciliation accounts in the general ledger. These reconciliation accounts ensure that the balance of G/L accounts is always zero.

Who should prepare a bank reconciliation?

In business, every bank statement should be promptly reconciled by a person not otherwise involved in the cash receipts and disbursements functions. The reconciliation is needed to identify errors, irregularities, and adjustments for the Cash account.

What is vendor reconciliation?

The vendor statement reconciliation is the litmus test at the end of the procure to pay process. It identifies the issues between your system and your vendor’s accounts. A single clear report will reduce vendor queries, improve your vendor relationship and tighten your control over vendor spend.

Can we post directly to reconciliation accounts?

In order to maintain a clean reconciliation with the sub ledger, SAP reconciliation account can only be updated by the system through the sub ledger. Direct posting to SAP reconciliation account is prohibited by the system.

What are the 3 types of reconciliation?

Main types of reconciliation accountingWhat is Bank Reconciliation? … Vendor Reconciliation. … Customer Reconciliation. … Business-specific Reconciliation. … Credit card reconciliation. … Balance sheet reconciliation. … Cash Reconciliation.

Why do you perform subledger to GL reconciliation?

The general ledger would not contain detail for each individual transaction. As there is always opportunity for a human mistake, it is important to reconcile the general ledger balances to the sub-ledger balances on a periodic basis to spot such mistakes.

Why a reconciliation account is used?

Reconciliation is an accounting process that ensures that the actual amount of money spent matches the amount shown leaving an account at the end of a fiscal period. Individuals and businesses perform reconciliation at regular intervals to check for errors or fraudulent activity.

How do you prepare a reconciliation?

Bank Reconciliation: A Step-by-Step GuideCOMPARE THE DEPOSITS. Match the deposits in the business records with those in the bank statement. … ADJUST THE BANK STATEMENTS. Adjust the balance on the bank statements to the corrected balance. … ADJUST THE CASH ACCOUNT. … COMPARE THE BALANCES.

What is the difference between general ledger and subledger?

The total of the transactions in the subledger roll up into the general ledger. For example, a subledger may contain all accounts receivable, or accounts payable, or fixed asset transactions. … In an accounting software package, a subledger is a database, rather than a manually-maintained book.