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 (BNK_RECON) 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.