Resolving Reconciliation Exceptions

This chapter provides overviews of reconciliation exceptions and reconciliation exceptions workflow and discusses how to process reconciliation errors and exceptions.

Understanding Reconciliation Exceptions

When you automatically reconcile bank statements, some bank transactions may not perfectly match system transactions. In these cases, you must analyze the transactions that do not match and determine the source of the errors. Typically, mismatches are due to bank errors in reference IDs (for example, check numbers, amount mismatches, transaction type mismatches, duplicates, items not found, and transactions for which the currency has not been defined at the bank account level).

When you use tolerances to reconcile transactions, the process inserts the differences that are associated with the transaction into the BNK_RCN_TRAN table. You view these differences on the External Transactions page. The system assigns the new lines a unique reference number that begins with BSP (bank statement processing) or whatever has been assigned in the auto numbering, plus a sequential number.

The Cash Management Bank Statement Accounting functionality works similarly to the reconciliation exceptions functionality. When an NTF (No Transactions Found) or MSC (Miscellaneous) exception is matched to a BSA (Bank Statement Accounting) rule (with an accounting template), the system reconciles the exception and enters an external transaction with a unique reference number into the BNK_RCN_TRAN table.

After you determine the source of the errors, you have several options, depending on the type of mismatched information:

• If the reference number that is sent by the bank does not match any reference numbers in the system, the transaction is considered an automatic reconciliation error.

  The Auto Recon Errors report lists all automatically reconciled errors. You can reconcile these transactions using automatic or manual methods.

  • To automatically reconcile these transactions, force reconciliation using the Automatic Reconciliation Exceptions page. If the transaction matches the system processing criteria for automatic reconciliation, the system creates the necessary system-side transaction, then reconciles the pair.

  • To manually reconcile these transactions, you must create an external transaction and reconcile the pair using the Semi Manual Reconciliation page.

    Note. If you are using the preceding method to manually reconcile transactions, you are responsible for using the correct accounting template when creating the external transaction to keep your organization's ledgers balanced.

• Unpaired transactions are generally third-party external transactions that exist outside your organization's PeopleSoft system. These might be from a legacy system in your organization that reports these transactions to the bank. Because the legacy system is not integrated with your organization's PeopleSoft system, when you receive the bank statement, these transactions do not have a matching system-side transaction in the PeopleSoft system. However, if you map third-party external transactions (meaning that you configure the application to automatically load all external transactions using statement activity types), the force reconciliation process inserts the corresponding system-side transaction into the system when you force reconcile.

  The system generates the accounting entries based on the accounting template that you assigned to the statement activity type (if you assign an accounting template). This can apply to only the first notice of items (such as fees and interest) from the bank that are not yet in the system.

• If the reference number that is sent by the bank matches a reference number in the system, but the transaction codes, amounts, or dates do not match, the transaction is an Auto Recon Exception.

  The Auto Recon Exceptions report lists all reconciliation exceptions. You can force any exception transaction to reconcile despite the discrepancy on the AutoRecon Exceptions page. The system creates external-transaction, offset entries when a transaction meets the following two conditions: the transaction is defined with a valid statement activity type, and this statement activity type is defined with the BNK_RCN_TRAN transaction table.

  Pairing a transaction forces reconciliation on the bank side and the system side. When you select only one transaction (you did not pair the transaction because it was not listed on the Recon Exception page), you must manually add the appropriate journal entries for the transaction after you force-reconcile the selected transaction.

• If the reference number that is sent by the bank matches a reference number in the system, but the amounts do not match, the transaction is also an exception.

  You have two options to resolve the problem:

  • Change the amount for the reconciliation tolerance for the bank account so that the transaction reconciles, and then run the Bank Reconciliation process (FSPRECON) again.

    The system generates the appropriate journals.

  • Make an adjustment entry on the system side and use the Semi Manual Reconciliation page to reconcile the transactions.

See Also

Setting Up Reconciliation Tolerances

Defining Statement Activities

Reconciling Externally Generated Transactions

Understanding Reconciliation Exceptions Workflow

If you have implemented the Exceptions workflow when you run the Reconciliations Exceptions process (TR_RECON_EXC), the system automatically routes any exceptions to a defined user (or user's) worklist.

See Also

Routing Exceptions to a User's Worklist

Delivered Workflows for Banks Setup and Processing

Processing Reconciliation Errors and Exceptions

This section lists prerequisites and discusses how to:

• Route exceptions to a user's worklist.

• Run error and exception reports.

• Force exceptions to reconcile.

• Resolve exceptions using semimanual reconciliation.

• View accounting for forced reconciliations.

Prerequisites

If you plan to route exceptions for automatic reconciliation to a user's worklist, you must first selectEnable Workflow for the bank account on the Account Reconciliation page.

See Also

Selecting a Reconciliation Method

Pages Used to Process Reconciliation Errors and Exceptions

Routing Exceptions to a User's Worklist

Access the Route Reconciliation Exception page (Banking, Analyze Exceptions, Route Reconciliation Exception).

Select a bind variable name of either BNK_ID_NBR or BANK_ACCOUNT_NUM and enter a value.

Running Error and Exception Reports

Access the Automatic Reconciliation page (Banking, Reconcile Statements, Automatic Reconciliation).

Select either Errors or Exceptions in the Reports field, and then click Run Report.

See Also

Reconciling Transactions Automatically

Forcing Exceptions to Reconcile

Access the Automatic Reconciliation Exceptions page (Banking, Analyze Exceptions, Auto Reconciliation Exceptions).

The page displays a combination of all potential matches based on date, amount, and reference ID number. Use your own judgement when you force items to reconcile. In some cases, transactions appear multiple times after being forced to reconcile, so you must be careful that you select the correct reconciled combination.

Note. Some automatic reconciliation exceptions may be the result of unbalanced payments in PeopleSoft Enterprise Accounts Receivable. To remedy this, you should balance the payment on the Regular Deposit pages in Accounts Receivable.

Search Criteria

If you access this page by clicking the Exceptions link on the Automatic Reconciliation page, the exceptions for the selected bank's statements automatically appear in the grid. Otherwise, you must enter your search criteria and click Search.

Auto Reconciliation Exceptions

For the system to force a transaction to reconcile, the transaction must match the following criteria. If the transaction does not match this criteria, the Force Reconciliation option is unavailable.

Note. This criteria is applicable only if you are using a Treasury application. If you are using the PeopleSoft force-reconciliation functionality with PeopleSoft Payables or PeopleSoft Receivables, the Force Reconciliation check box is always enabled.

• You must have installed one or more of the Treasury applications, such as Cash Management, Deal Management, or Risk Management. The force-reconciliation functionality uses statement activity types for storing the accounting template and the source table (BNK_RCN_TRAN) information, from which the system creates the offset entries. However, the ability to define statement activity types is available only if you install a Treasury product.

• The bank statement transaction must have a valid statement activity type on the Bank Transaction Entry page.

• You must complete all three fields for the statement activity type that is associated with the bank statement transaction in the Force Reconciliation Options region of the Statement Activity Type page. These fields are Allow Force Reconciliation, Transaction Table, and Accounting Template ID.

• You must select the Statement Accounting option on the External Accounts page. This ensures that the correct ChartFields for first-notice items, such as fees and interest, are established. In addition, when the system creates the offsetting external transaction, it sets the internal Build Accounting status to yes. This ensures that these transactions are properly built during the next Automated Accounting process (TR_ACCTG) run.

In addition, when forcing transaction pairs of unlike amounts to reconcile, the system automatically generates a balancing transaction. For example, if the bank statement amount is 100 USD and the system transaction amount is 99.99 USD, then the system creates a balancing transaction, which results in a credit in the amount of 0.01 USD. This credit is recorded in the table that is specified in the associated Statement Activity Type definition (either BNK_RCN_TRAN or CASH_FLOW_TR). If the system transaction is of a greater amount than the bank statement amount, then the system creates a debit and records it to the appropriate table. Using the preceding example, if the bank statement amount is 100 USD and the system transaction amount is 100.01 USD, then the balancing transaction is a debit of 0.01 USD.

In the Description field for each exception, details from the bank transaction file appear along with the reason that the transaction did not reconcile. Possible values are:

To force a transaction to reconcile, select the transaction and click Reconcile.

See Also

Understanding Reconciliation Exceptions

Resolving Exceptions Using Semimanual Reconciliation

Access the Semi Manual Reconciliation page (Banking, Reconcile Statements, Semi-Manual Reconciliation).

If the Bank Reconciliation process could not reconcile a transaction, you can try to manually match transactions from the bank side to transactions on the system side, as long as the amounts match.

You can reconcile transactions only by matching one bank transaction to one system transaction (one to one) or one bank transaction to many system transactions (one to many). Select the transactions on each side that you want to reconcile, and click Reconcile.

See Also

Reconciling Transactions Semi-manually

Viewing Accounting for Forced Reconciliations

Access the Bank Statement Processing Accounting (BSP) page (Cash Management, Treasury Accounting, Accounting Events).

To view all journal entries for transactions that were forced to reconcile, run the Automated Accounting (TR_ACCTG) process prior to accessing this page.

See Also

Reviewing Accounting Information