Reconciliation - concepts and design considerations

The integration mapping scheme setup and the reconciliation data must be thoroughly considered prior to implementation. The most suitable and informative setup can only be designed with a good understanding of the integration mapping and reconciliation possibilities and after an accurate analysis of your business processes.

This topic describes the integration transaction handling concepts and components that are specific for reconciliation and analysis and provides a number of general guidelines for the setup.

An integration document type represents a type of integration transaction in Financials. For financial analysis and reconciliation, the integration document types identify the type of transaction.

In Operations Management, each integration transaction is represented by its combination of operational transaction origin and financial transaction. In the Finance/Logistics module of Common, the transaction origin/financial transaction combinations are translated to integration document types. For example, the Sales Order/Issue transaction is translated to the integration document type with the description Sales Order/Issue.

LN provides predefined integration document types for all possible integration transactions and for all the transactions that must be identified during financial analysis and reconciliation. The integration document types each have the corresponding business object attached to them. For example, the integration document types for the various Sales Order transactions have the Sales Order business object linked to them.

In the integration mapping scheme, you can map an integration document type to one or more ledger accounts and dimensions. Usually, the debit side and the credit side of an Operations Management transaction are posted to separate ledger accounts.

Because a reconciliation group reflects the type of ledger account, each integration document type is linked to two reconciliation groups, one for the debit side and one for the credit side.

Most of these integration document types are only used to log the reconciliation data, for example, the Opening Balances integration document type. You cannot map these integration document types and the Mapping Allowed check box is cleared in the Integration Document Types (tfgld4557m000) session.

A reconciliation group represents the kind of ledger account used for the integration transactions and, in this way, represents a group of integration ledger accounts on which you can perform reconciliation. A reconciliation group consists of the combination of a reconciliation area and a subarea, for example, Invoice Accrual/ Purchase Order.

To each reconciliation group, one or more integration document types are linked. In the integration mapping scheme, the integration document types are mapped to the ledger accounts and dimensions.

Each integration document type is linked to two reconciliation groups, one for the debit side and one for the credit side. You can view the integration document types of a reconciliation group in the Integration Document Types by Reconciliation Group (tcfin0115m000) session.

In the Reconciliation Groups (tcfin0120m000) session, you can view and complete the details of the generated reconciliation groups with the details required for the reconciliation and financial analysis in your organization. For details, refer to The reconciliation group details.

You can optionally use the reconciliation elements to structure the reports and other presentations of the reconciliation data and to facilitate the interpretation of the reconciliation data. Other examples of reconciliation elements are the order document number, the warehouse, and the buy-from business partner. A reconciliation group can contain up to five reconciliation elements. Each reconciliation element represents a business object attribute.

When you view the reconciliation transactions, you can sort the transactions on reconciliation element and you can find transactions with specific values of the reconciliation elements. In addition, you can generate reports based on the reconciliation elements and combinations of elements.

In the Reconciliation Groups (tcfin0120m000) session, you can assign up to five reconciliation elements to a reconciliation group. Which reconciliation elements you select depends on your business processes and reporting requirements.

The reconciliation elements must be assigned very carefully and after you set up the reconciliation data, you must only change the reconciliation elements if this is necessary.

The assignment of reconciliation elements is especially important, for example, for the Inventory reconciliation group, as the business objects of the debit transaction and the credit transaction differ. You cannot accept these reconciliation transactions by business object ID and select the Only Debit and Credit Balanced check box. However, if you choose the reconciliation elements as the basis for acceptance you can accept the transactions for which the debit transactions and the credit transactions balance. On the report, the debit transactions and the credit transactions are printed by item code.

Reconciliation elements are similar to, but not the same as, mapping elements. Mapping elements represent a more detailed level of the reconciliation elements.

A mapping element is a characteristic of a logistic transaction, in other words, a business object, that you can map to a ledger account or dimension. A reconciliation element is a common characteristic of the integration transactions (integration documents) of a reconciliation group, which you can use to analyze and reconcile the data. In other words, a reconciliation element links the corresponding mapping elements of various business objects.

The internal codes of the mapping elements differ but physically, the production order item, the inventory item, and the sales order item can all be the same item. For all these transactions, the corresponding reconciliation element is Item (internal code 014000000000).

If you only map elements that have the same corresponding reconciliation element to a specific ledger account, during reconciliation, the resulting balance of the account can be zero.

If you map elements that have different corresponding reconciliation elements to the same ledger account, the reconciliation is more complex. In most cases, the resulting balance of one account will not be zero, but the balance of a group of ledger accounts to which the transactions are mapped can be zero.