3. Defining a Reconciliation Class

3.1 Introduction

To recall, you have defined Match Rules in the Matching Rule Definition screen. Several rules constitute a reconciliation class. You can define a reconciliation class in the Reconciliation Class Definition Screen.

You can indicate the match rules that should constitute a class and the sequence in which the rules should be made applicable to an external accounting entity during automatic matching. A significant attribute of an account class is whether the transactions that are to be matched are mirrored or replicated.

The advantage of maintaining reconciliation classes is that at the time of automatically reconciling and matching external entity entries, you need to just indicate the code assigned to the class. All the details maintained for the class will be automatically picked up and made applicable to an external entity account.

3.2 Reconciliation Class Definition screen

This section contains the following topics:

3.2.1 Invoking the ‘Reconciliation Class Maintenance screen

You can invoke the ‘Reconciliation Class Maintenance’ screen by typing ‘REDXCLAS’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

If you are maintaining the details of a new class, click the new button on the Application toolbar. The ‘Reconciliation Class Maintenance’ screen is displayed without any details.

If you are calling a Reconciliation Class Definition record that has already been defined, double-click a class record of your choice from the summary screen.

3.2.2 Assigning Reconciliation Class a Code

In Oracle FLEXCUBE, each reconciliation class that you define is identified by a four character code called a Class Code. You can follow your own convention for devising this code.

The code that you assign to a class should be unique as it is used to identify the class across the branches of your bank. When you need to make the class applicable to an accounting entity, you need to just specify the code assigned to the class. The details that you defined for the class will automatically be made applicable to the accounting entity.

After you assign a reconciliation class a code, you can specify the preferences based on which internal and external transactions should be matched, if the reconciliation class is made applicable to it.

The attributes that you can define for a reconciliation class are:

You can define several classes using various combinations of the above parameters.

3.2.3 Description

You have to enter the Description of Recon Class Code in this field

3.2.4 Specifying the Adjustment GL

When maintaining a Reconciliation Class, you can identify an Adjustment GL to which unreconciled entries involving the Reconciliation Class should be posted. All unreconciled entries, involving the Class, will automatically be posted to this GL.

3.2.5 Indicating the Reconciliation Class Type

Mirroring

A Mirror reconciliation class type is one, which when applied during automatic matching, will check that the debit or credit indicator of the external statement should mirror that of the internal transaction. This means that a debit in your books will have a corresponding credit entry in their books and vice-versa.

Consider the following example.

Friendly Neighborhood Bank has placed US $100,000 with Greenville Global Banking, Bangalore.

The entries passed at FNB:

Account

Debit / Credit

GGB

Cr

Internal GL

Dr

When GGB makes a repayment for the placement, the entries that are passed are:

Account

Debit / Credit

GGB

Dr

Internal GL

Cr

If you have indicated mirror matching for the class, these entries will be matched as the external entries mirror the internal ones.

Replication

A Replication reconciliation class type is one, which when applied during automatic matching, will check that the debit or credit indicator of the external statement replicates the internal transaction.

Note

Initially, one reconciliation class will be pre-shipped. The account class is called - NOST (Nostro Reconciliation). This reconciliation class is needed when you want the external ac­counts that have come in through SWIFT to be automatically uploaded. The MT950 has been hard coded for the reconciliation class NOST.

3.2.6 Indicating the Sequence in which Match Rules should be made Applicable

An account class is made up of several match rules. You can not only indicate the rules that constitute the class but you can also indicate the sequence in which the rules should be made applicable during automatic matching of entries.

3.2.7 Assigning Rule Sequence Number

The system assigns Rule sequence Number for the rules attached to Recon Class Definition.

To make a rule, a component of a reconciliation class, select the rule from the adjoining option list that is displayed. The description of the rule is displayed. Thereafter, click add icon. To delete a rule from the list, select the rule and click delete icon button.

3.2.8 Specifying Parameters for the Manual Matching of Reconciled Entries

The reconciliation module provides the option of defining amount tolerance limits for the manual matching of reconciled entries. Using this option you can choose to reconcile entries with differences within the manual matching limits.

You will be allowed to match reconciled entries manually when there is no difference between the net amount of the external and internal entries. However, you will need to maintain a limit per currency in order to be able to manually match amount differences up to the limit. You can do this through the Reconciliation Class Definition screen.

You have to maintain manual matching limits in currencies for which you would like to allow manual matching. Usually, these are currencies in which you have maintained nostro accounts. The manual matching specifications will be made applicable for all nostro accounts linked to the reconciliation class.

As a result of maintaining manual matching limits, you will not be allowed to manually match entries whose differences are not within the limits defined.

Note

You have to maintain limits for all currencies in which you have maintained the nostro ac­counts in the system.