Performing Intercompany Matching and Reconciliation

Anthony's colleague, Peter, knows that after you translate local currency into group currency, you need to match the intercompany transactions.

Let’s learn more about this below.

Watch the following video to learn the overall process of matching and reconciling intercompany transactions.

At ABC Corporation, you're getting ready to match and reconcile intercompany transactions. You can use the Reconciliation Balances app to view the balances and differences for pairs of trading partners.

With the Reconciliation Balances app, you can display the YTD and period amounts of your specified organizational units and their partner units and their amount differences in a specific fiscal year/period.

In the following Reconciliation Balances example, two different measures are used to display the intercompany values in different currencies. For example:

1. TSL Closing measure:
   • Displays the true (without any currency impact) variance.
   • Based on transaction currency values at the closing rate. -5,395 is the transaction/true variance for DE02 and US02.
2. KSL Amount in Global Currency measure:
   • Displays the total variance.
   • Based on local currency values at the closing rate. -7,087 is the total variance for DE02 and US02.

Now that you viewed the intercompany balances, you can do some matching.

You can perform a matching run manually or automatically via background jobs.

You can run matching from several apps:

• Define Matching Methods

• Manage Assignments - By Matching Method

• Manage Assignments - By Reconciliation Case

• Schedule Matching Runs

You can use the Manage Assignments - By Reconciliation Case app to view matched items and assign the items that aren't matched:

1. Select the reconciliation case you want to use.
2. Enter the filter values for Display Group, Amount Field, and Currency,
3. Choose Go to show all unassigned items for your selected leading unit and all its partner units.
4. Choose Auto Match to run matching for unmatched items. All items are compared by all matching rules sequentially.
5. Check any matched items and their generated assignment numbers in the Assignments table in the lower part of the screen. From there, you can proceed with manual assignments, adjustments, or approval as necessary.

In the Manage assignments by reconciliation case, there are two main options to assign leading and partner unit transactions:

1. Manual matching
2. Auto-Match is used to assign the leading and partner items automatically.

For any items, matched or unmatched, you can take the following actions (non-workflow related):

• Assign: This is a manual match in case the matching rules don't apply. If you think certain unmatched items should be exempted from matching rule validation and matched manually, you can select the items and choose Assign to match them manually. The assigned items are then moved to the list in the lower area of the table called Assignments.
• Communicate:
  • Add Note: Add a public comment and optionally, a due date. This option results in the communication status Note Added. Based on your set due date, any overdue matching items are highlighted in red. These are only viewed from the assigned items log.
  • Send Notification: Send a notification to selected recipients, and optionally, a due date. As a result, the communication status changes to Notification Sent and the recipients receive the notification in the header bar of the SAP Fiori launchpad.
  • Send e-mail: Send an email to an SAP S/4HANA user.
  • Set to Done: When a certain comment or notification is resolved, you can set the item to be done so that the due date and overdue alarm are cleared.

Now that you have run matching, it is a good time to run the Reconciliation status overview app.

In the Reconciliation status overview image, the matching status is based on line-to-line item document matching. There are four possible matching statuses:

• Initial: No matching run has been executed.
• Not Assigned: Not all documents have been assigned.
• All Assigned: All documents have been assigned but not all of them have been matched.
• All Matched: All documents have been matched.

In the Reconciliation status overview image, the Reconciliation Balances column can have any of the following three colors::

• Green indicates that the partner unit has identical aggregated amounts as the leading unit.
• Yellow indicates that the partner units has aggregated amounts different from the leading unit that are equal to or lower than the tolerance.
• Red indicates that the partner units have aggregated amounts different from the leading unit that are greater than the tolerance.

With the Manage the Reconciliation Close app, you can set the reconciliation close status, view reconciliation differences by reason code, trigger an approval workflow, and generate reconciliation statements.

In the following image, these are the key points:

1. Because the variance for US and CA is over the threshold, it appears in red.
2. The Elimination Status is Initial because elimination has not been run yet.
3. The Workflow Status is Approved and the Reconciliation Status is Closed.
4. In the details, you can find the leading and partner amounts, add comments, and download the document as a PDF file.

When closing the reconciliation, any variances outside the tolerance generates an approval workflow for users who are on the reconciliation team. In the resulting inbox, the trading partner data is displayed. The user can then approve or reject the approval request. They can also download a PDF with the summary.

Workflow Status: This status is relevant for the reconciliation cases that require an approval workflow to close reconciliation. The possible workflow statuses are Waiting, Ready, In Process, Error, and Completed. Only when the workflow is completed, that is, the reconciliation close request is approved, can the reconciliation close status be set to Closed.

Elimination Status: This is the execution status of the IC Balance Sheet Elimination consolidation monitor task. It's only relevant for the reconciliation case that is consolidation related and is assigned with the elimination method SC001 in configuration step Define Elimination Methods. The following statuses are possible:

• Initial: The elimination task hasn't been executed yet.

• In Process: The elimination task is initiated and running.

• Completed: The elimination task has finished successfully.

• Failed: The elimination task ran into an error, for example, due to system error or misconfiguration. The error details can be viewed in the Task Logs app.

• Outdated: The elimination task was once executed and finished successfully, but after that, a new matching run was triggered and brought new posting data, which makes the prior Completed status outdated. Therefore, the elimination task needs to be executed again.