How-To Work with Internal Reconciliations in SAP Business One V. 9.0



Oh hello and welcome to Mitchell Consulting's webinar series for our Mitchell University today we're going to be working with FA P business one we're going to be going over the concept of an internal reconciliation this webinar is being recorded will be available on our website so you can visit us at WWDC our comm to see this plus the other training videos we have today we're going to be working with sa P this is one version 9.0 now this version we're going over today is the latest version but the concept of the internal reconciliations is in the older versions as well so let's talk about what we mean by internal reconciliations in SA P in sa P the data is never really deleted from the system which means when we enter an invoice or credit or payment it stays in the system so what happens is in a typical scenario and we'll talk about the business partners today we enter an invoice and the invoice is in the system and then the invoice gets paid so if we look at the business partners aging you no longer owes this payment so we can have it seen now it doesn't get removed some systems will actually remove it at month n it becomes reconciled so there's two types of reconciliation there's system reconciliations which are done internally by sa P for example when we do an incoming payment and we pay an invoice from a customer that payment is internally reconciled to the invoice but it's a system reconciliation which means it was done by s ap the other thing the manuals are what we call internal reconciliations allows us to do that so we can then take a credit memo and apply it so we're going to go over these concepts today they're available for the general ledger as well as the business partners aging we're going to focus more on the business partisans typically used here but you can also do it in the financials the concepts the same we'll focus first on the business partner and then we'll do one on the financials so we can see so let's talk about what we mean by the data not being erased we're going to go into business partners business partner master data I'm going to call up a customer let's go ahead here let's call up Brook shaker and here we have the account balance so we can see here that this customer owes us this money this is the open balance of the outstanding aging six hundred and twenty eight thousand if we click here into the system you can see we have invoices and payments and we have an option here displaying unreconciled transactions only so if you notice right now I do not have that term done so I'm looking at everything you can see that I have this invoice here for twelve thousand five thirty five you can see that I have a payment here for twelve thousand and you can see the balance is zero if I open up this invoice and you can see this is pretty old so this invoice was paid you can see here it's an AR invoice you can see the status is closed you can see there's an amount applied so it's zero so this AR invoice number three was paid with this incoming payment number four so we can see here and again we can see the payment so that is what's known as a system reconciliation okay if I go here and I say display unlock unreconciled transactions only since that's a system reconciliation similar to an internal reconciliation you will see that all these balance views with zero all here are going to go away so if I click this you can see now you don't have that so this is the actual aging this is what makes up the 628 this is what is open or not reconciled so once again you can see the information here if I uncheck that you can see the information here we can also do a right-click on the line we can look at applied transactions and again we can see that this invoice the applied transaction is the payment so we have that so these are called system reconciliations these are done by the actual system if there was a mistake I really can't undo this reconciliation I would have to go in to the incoming payment here and I would have to go into data and cancel the incoming payment in Reverse so that's a typical system reconciliation here now what we can also do what's known as internal reconciliations which we can do here which allow us to manually do this so typically this would be done like we have an on account payment or the customer has an invoice and any has a credit so because there's no internal link since s AP didn't do the system reconciliation example an s AP I didn't go into the incoming payment and select the invoice those would always be on the aging the customer will have a zero balance but you'll always see this we want to basically remove those and that's done here with the internal reconciliation button so let's find an example let's actually do a couple here let's actually just kind of do let's do an on account payment and we're going to go ahead so we can apply that and we'll also do a credit so let's do a couple of those we can see how it works so we're going to go here into banking incoming payments incoming payments we're going to go and call up our customer Earthshaker okay now normally what we would do is when we paying normally if you buy us selecting this invoice here and then paying it that's how the system reconciliation is going to work it's going to know that incoming payment 112 was applied to this AR invoice 265 in this case we're not going to select anything we're going to do an on account payment and we're going to put in say $15,000 I'm going to go to our payment means and let's say we're going to do that with a let's do it just a bank transfer let's go here and select me see we have four banks just put this against to this we use today's date I'm going to right click copy balance to so we're going to enter a payment we click OK I'm going to add this if we see here if you we have an incoming payment for the amount and it's not really affecting anything so this is something that we're going to use for an internal reconciliation we can also do the same with a credit so let's just before we go into the internal reconciliations let's just enter a credit memo we want to do the same thing when we call it broth shaker let's go here and we would have to 100 let's just make this exempt a lot of tax I'm going to take our discount out I'm going to have here we have let's make this 100 of them so office I don't have a fifteen thousand dollar credit okay we're going to add this so now we have those in the system so we have a payment and a credit that will not done in an eternal reconciliation now normally in an internal reconciliation in the case of a credit we would actually go in and this is more detail if you want to see our webinar about the document relationship normally when we would do a credit memo in order to do a system reconciliation we would go here let's say we're doing a credit again for Earthshaker and he's returning merchandise that he bought on a previous bill we can do a copy from a our invoices and then we can go ahead and select an AR invoice and you can see now that in the link so if we go ahead and add this one this would be the concept of a system reconciliation so what we're doing is when we're creating the credit member we're saying this credit member belong to that invoice as opposed such as creating the credit memo so if you see here if we right-click and look at the relationship map you can see that we have the credit memo being applied to the invoice here we see this link okay we see everything involved in here and this is a typical system reconciliation because if I look at these two and we'll see how they're linked internally as opposed to if I go back one this AR credit and I look at the relationship map there's no link this is just a credit member that with them okay so we have a credit memo here and it is willing to anything so this one by itself would be no it's not right it's not internal reconciled you'll want to be an internal reconciliation and again we can see that if we go to the business partner so let's go to the business partner let's go to Earthshaker click our account balance and let's see on a posting date let's put let's just set this I'm going to set that as my posting things again I just want to have less data on the screen so we can see so again you can see the same thing here you can see that if I say display on reconcile transactions only I'm going to see the ones so here you can see that information again let's deselect that for a minute because you can see here these two credit that came in the second credit here number 13 notice it has a zero balance and if I right-click and look at the applied transaction that is because I when I was doing the credit memo I did copy from the invoice so that's consistent reconciliation it's in the system these two here have nothing so if I right click I look at the apply transaction I'm empty so now what we're going to do is we have this and what we want to do is we want to now applied it to some old invoices let's say there's a we'll start first with the incoming payment and say the customer gave us fifteen thousand dollars and he says just applied to the oldest invoices so let's do that we can do it directly from here in the internal reconciliation which we'll do today it's also available if you go in the menu itself here under internal reconciliations we can do it here let's just do it from here this makes it easier because we have the AG on the screen we're going to look at internal reconciliations now when doing the internal reconciliation it's important on the reconciliation date the reason being is one of the nice features of s AP is because no data is erased I can go back any time and reprint my aging what happens in a lot of older systems there's typically a month end process and the month end process removes all the zero down or all the paid invoices and they're gone and then what happens is somebody comes in says oh I need to run the aging from two months ago and I can't because all that date is gone here what s API can do that I can run the aging back in time and the system knows based on all these dates so if I let's say I run it back on January it knows all the invoices after entered after January not to include and all the reconciliations before to include and so on so it's important on this reconciliation date again for that because sometimes people what may want to do is they've made some of these credits and payments were done you know over the last three months I just never did and they come in here one day and so you know what let me just reconcile everything today and then the problem is when I go back to reprint the Aging's there will kind of be out of balance it won't match so if you do this it's a good best practice to actually reconcile based on the date and typically once that once that incoming payment comes in and we're going to apply it we would do it that one so we're just going to use today's date but again that's important when you're doing it you can also see we can actually also add adjustments down here as well let's go in here and let's just make this field a little bigger so we can say we're going to go in and we're going to say ok we're going to take this incoming payment this RC 112 here and we're going to apply it now the key is when we apply you can see here we have the balance and the amount to reconcile so what I'm going to do here is I'm going to do an example with the small ones I want to do is I'm going to say let's say this 15,000 we want to put it against this invoice let's say this invoice this one this one this one this one so I you can see down here until I run out of money so let's say now I have the 874 left over 871 before so I'm just going to change the amount to reconcile to 870 1.44 and I'm going to select that I'm going to select that didn't select it so what we're doing here is we're showing the zero the key is this has to be equal to zero so now I'm going to click reconcile and you can see how I reconcile those transactions okay now no longer here I can also do adjustments here if I want I can create a journal entry and add an incoming and outgoing payment again these are just adjustments if something was you know how to do it kind of on the fly you can do it this way as well so let's go back and now let's look here at this information so again now we can see that the incoming payment here is now zero all right it's been applied so if we right click on this document we look at the apply transactions we can see how it was applied you can see we paid all these invoices and this one here that was a 1086 we applied the 870 one so we have an open balance of 214 okay and again we would see that in here we just have all these other dates but we would see that in here we again unselect display reconcile transactions only you'll notice that that information is not here again you don't see that incoming payment we just did so we have that information here and again you can see all the information here as we displayed unreconciled transactions we have the same here here's another one I have the applied transactions so you can see again here is the amount and here's everything we apply on that incoming payment we can also do the same thing here which is credit we want to do a simple credit against the whole thing again we can go to internal reconciliations we're going to grab the credit which I always like to do it first ICD ml and I'm going to do a simple one here I'm going to take something this one here and amount to reconcile fifteen like that so it's a partial peg we're going to click reconcile you had very simple you can see now it's reconciled if we go out of here and again we display on record file transactions only you can see that we don't see it these are the ones that on reconcile only and you can see that invoice we did on 319 you can see here the balance due this amount again if we look at this transaction the general ledger if we look at the transaction you know you can see the amount applied and it also holds true here if you're in the AR invoice you can go to the applied transactions and you can see it here on an individual invoice as well so you can see what we apply we applied here the 15,000 to this amount so the total is one hundred sixteen thousand we applied fifteen so we have the 101 yeah and very simple to work with that's how we do it we can do the same thing with the credits and so on internally now if we made a mistake let's go in here and let's say how we want to now back this stuff out all right so what we can do is we can go into the internal reconciliation menu under business partners and again the reconciliations just the same screen except here you would have to go in and select the business partner because we're not actually in the business partner but it's the same principle it's just going to call up the same screen as we were just in so now let's look at manage previous reconciliations let's go here and let's put the reconciliation day it's just a number so we want all the numbers and let's look at we're looking everything for the business partners and again you can see business partners and GL accounts we want to see everything from the business partner that was reconciled on that date and we see here that the example we did just now is member we have that credit memo here that's a system reconciliation you can see the reconciliation type is credit memo that's what the system did you also notice that the canceled reconciliation button is grayed out okay that means it was done internally by the system so in order for me to reverse that I would have to go in and cancel the documents because they're done interment unlink it but however if I click on the manual reconciliation okay again you see everything here but you have the ability of doing this cancelled so these are the two eyes here so we have this one and if we cancel it's going to undo it so let's just cancel the smaller one here so this is the $15,000 credit that we put against the invoice so remember now if we look at the invoice which is invoice 274 we see down here that we have the amount of line so we're going to now just cancel this because we made a mistake we're just going to say cancel and now you can see it's cancelled so now if I go back to the invoice you can see that the amount of light is gone and it's here and it tracks it in the system so let's go back into the business partner and let's call up Earthshaker again and you can see here that now when I turn this off and on you can see the 116 is here and the informations here and if I right-click on this and I look at the applied transaction you're going to see the ins and outs so you're going to see that we had this 1616 thousand that we applied this invoice and you can see the amount of ply we can see the positively in and out the positive and negative so again we just cancel that so we can open it up again we'll do the same with the other one you can see the effect of transactions so again we're going to go to manage previous reconciliation we're going to click OK and again we can still see that that with cancel so we have that audit trail in our system remember and si P nothing is ever deleted it's always there in some form so now I'm going to go to this one right here this big one and if we cancel the reconciliation again you can see that was cancelled so again let's go back to the business partner and because we can so that we can just go and do it again there's maybe we've selected the wrong stuff the wrong invoices so we can see here that we're open again so if we go to this payment we look at the apply transactions again now we can see the apply transactions where's this one here and again you can see the cancellations of the information on this one and again we can see the information here so what this allows us to actually go in and remove it and go back and take it on so again the internal reconciliation it works the same way in the financials typically it's not done so much in the financials but for example here let's go to the chart of accounts and let's look at let's find an account here and again we're just looking at these transactions again if we right click we can look at the applied transaction the deposit but we can actually do this internal reconciliations as well and we can do the same typically it's not done this time it can be done if you have a lot of ins and outs and you want to just clean up how the how it behaves notice we're not posting anything because we're not really affecting anything we'll just canceling ins and outs so technically we could do this if we wanted to we can say take this one and this one an amount of reconcile we could put the 14 again it's not really used that much but we can do it the only reason why we would do it here in the general ledger and when you do have some clients that will do it it's just because the same principle of this display of reconcile transactions only again they may have like expense account setup or typically I had a client in debt had for travel and reimbursement to to customers they want to just you know clear that up to make it easy to look at but again the principle is exactly the same from the financial which is the general ledger versus the business partner but again it's used mostly on the business partner sign okay so let's recap what we've gone over today today we talked about the internal reconciliation process NS AP when we talk about reconciliations we talk about linking documents typically when in this case were linking and invoice to a payment or an invoice to a credit memo and so on there's two types of reconciliations there's the system reconciliation which sa P does in the background so we saw that when we enter a payment and we say that this payment is for this invoice it's going to be internally reconciled same thing when we do a credit memo if we enter a credit memo we say that this credit medal is what is invoice we use the copy from again that internal link is a system reconciliation the system reconciliations cannot be mantling distance are not manual they can't be deleted you'd have to go in and you know delete the payment and so on the other type of internal reconciliations are what's known as the manual reconciliations what we did today that's when I as the user determine what I want to do and this is typically done we have an on account payment okay at the time it was no invoices selected so we had that on account payment and then later in the fact we said they take this payment and apply it to these invoices maybe the client has a credit that was entered without an invoice and so on and that's all done through the business partner and again we could do it directly from the business partner master itself or through the internal reconciliation so again we're going to look at our Earthshaker and again there's the concept of the display utter marking file transactions only so again if you look here you can see the difference if I say if I uncheck tis I'm only looking for stuff that was posted in March and again you can see the Ballon to do with zeros when I click on display unreconciled transactions only you'll see that all the balance due zeroes will go away again that's being because we've applied that we know that if we right-click on the line and we look at the applied transactions we can see it here this invoice was done with a credit if we actually open up the document we can do it within the document cells so we can see that there's an applied amount and the balance too is zero we want to see what the applied amount was they were looking at this invoice was as a credit or is this a payment we would just right click look at the apply transactions and I can see it was done with the credit we also see that in a relationship map of the document again since it's an internal or system you can see here that it was done invoice credit you can see the link here and again those are systems if we do it manually again we have the ability of just going into the internal reconciliation and we can select what we want to do like you can see these journal entries here again let's clean this up so let's say we're going to take these journal entries here so down below we have an amount of 124 and we're going to apply that to say this invoice we can do that again this has to be zero if this is not give me a naka let me reconcile until this is actually zero so if I do that and I try to click reconcile you're going to get a warning reconciliation difference must be zero so we're just going to go back to this one again this one here again once this is zero we can go ahead and we can click reconcile and again we're done so if we look we can see that again we take the posting date off here we click this and we can see what we've done and you can see this is the 39 we this is the one we did so again if we look here we can see that of the 163 we apply the 124 again we can also right click look at the applied transactions within the document again you can see everything here again all the ins and outs whatever got closed and so on and then we can also manage previous reconciliations again these if we want to delete the or just look at them but if you want to delete the manual ones that we go to manage reconciliations and you have this can use today's date so again you can see this is the manual we've just done you can see the status manual again this is a credit memo this is a system reconciliation because of this you can see I cannot cancel the reconciliation is grayed out but if I click on this line I can go ahead and cancel this information these actually were cancellations of these so notice when I go here I also can't do the cancel the reason why I've already cancelled it so if you see that each one creates a transaction so reconciliation 303 got cancelled by reconciliation 305 and reconciliation 300 or got cancelled by 3:06 but if I go here then since this is new see I can cancel this reconciliation okay so that concludes today again what we've learned today is how the internal reconciliation works in SA P business once as we said this webinar is being recorded it'll be available on our website you can visit us at wwe.com to view this plus our other webinars in our training series and once again we thank you for your time

1 thought on “How-To Work with Internal Reconciliations in SAP Business One V. 9.0

  • Hi, Is internal reconciliation limited to vendor and customer accounts? Can this be extended to other general ledger accounts.

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