Reconciliation Accounts in SAP S/4HANA

The reconciliation account in SAP S/4HANA is an important concept used to manage and monitor financial transactions between a main account and its associated subledger accounts.


In theoretic accounting, it is also commonly referred to as a control account.


A reconciliation account is a balance sheet general ledger account that serves as a summary account or control account. It represents a category of transactions, such as AR or AP, at the general ledger level. Underneath the reconciliation account, there are subledger accounts that hold detailed transaction data.


Simplified Visualized Reconciliation Account Concept


In this blog post, we will uncover the mechanics of business partner integration and the foundational principles of its configuration in SAP S/4HANA. We also will scrutinize how reconciliation accounts are assigned to business partners.


Concept Overview

Typically, each subledger requires more than one reconciliation account. For instance, for AR, you probably would set up separate reconciliation accounts to distinguish receivables from external customers and internal, affiliated companies. Even for external customers, you may want to separate receivables from domestic customers and receivables from foreign customers.


Prior to initiating any accounting transactions within AR or AP associated with a customer or vendor account, you must assign a reconciliation account in the respective master data of the customer or vendor first.


Create Reconciliation Accounts

You can convert any regular general ledger balance sheet account to a reconciliation account by using Transaction FS00 or following SAP menu path Accounting > Financial Accounting > General Ledger > Master Records > G/L Accounts > Individual Processing > Centrally. You first go to the Type/Description tab, where you categorize the account as a Balance Sheet Account under the G/L Account Type dropdown, for account group Recon.account AP/ AR, selected under the Account Group dropdown, as shown in this figure.


Type/Description of Reconciliation Account


Then you need to specify in the Control Data tab what type of reconciliation account it will be (under the Recon. Account for Acct Type dropdown). You can choose Assets, Customer, Vendors, or Contract Accounts Receivable, as shown in the figure below. Specifying the account type and the reconciliation account type is highly recommended as doing so contributes to achieving consistent settings for and documentation of reconciliation accounts.


Control Data to Specify Reconciliation Account Type


Assign Reconciliation Accounts to Business Partners

Once you have created the necessary reconciliation account, the next step is to assign it to a business partner in the role of a customer or a vendor account. To do so, you first have to access the relevant business partner using Transaction BP or through the following path in the SAP menu: Logistics > Sales and Distribution > Credit Management > Master Data > Business Partner Master Data. If you know the number of the business partner who will want to access, select Number in the By dropdown and enter the number in the BusinessPartner field, as shown here.


Access and Maintain Business Partner


You then double-click the partner number or in the line of the partner number in the lower half of the screen, and access the Display Organization: 17100001 master data view, as shown in this figure.


Business Partner Display Organization


Next, you change the role in Display in BP Role to FI Customer, as shown in this figure.


Select FI Customer to Access Customer-Specific Data for Relevant Business Partner


You can click Company Code to see all company code–relevant data, such as the reconciliation account.


Display Organization: 1700001, Role FI Customer


After clicking Company Code, you will see the assigned reconciliation account for business partner 17110001 in the role of a Customer in the Customer: Account Management tab, and the Reconciliation Acct field.


Display Reconciliation Account of Customer


You can switch between edit and display mode by clicking the glasses and pencil symbol in the menu header of the screen.


This assignment ensures that any transactions posted to any customer accounts or vendor accounts are also posted automatically and simultaneously to the corresponding reconciliation account in the general ledger.


There are two scenarios in which SAP S/4HANA will post to a different reconciliation account than the one defined in the customer or vendor role in the business partner master data. You can either modify reconciliation accounts manually during posting through configuration settings, or you can use a special transaction that deviates the posting to another reconciliation account automatically.


Editor’s note: This post has been adapted from a section of the book Account Determination in SAP S/4HANA: Business Processes and Configuration by Abdullah Galal and Jonas Tritschler.


Account Determination in SAP S/4HANA
Account Determination in SAP S/4HANA

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