Guidelines for Receivables to General Ledger Reconciliation

Periodically you need to reconcile the transactions in your accounts receivable system, both before and after you post to general ledger. The Receivables to General Ledger Reconciliation extract and report help to simplify this process and to reduce manual reconciling activity.

The automated activities in the reconciliation process function according to the way you set up your Financials environment. A review of some of these setups can help improve the overall reconciliation process.

Review these activities related to setting up your Financials environment for Receivables to General Ledger reconciliation:

• Business Unit vs. Ledger Reconciliation

• Accounts Receivable Financial Category

• Profile Option Settings

• User Security

Business Unit vs. Ledger Reconciliation

If you implicitly map primary balancing segment values to your business unit, you can reconcile based on business unit. This allows employees from different business units to balance their respective organization activity.

If you don't implicitly map primary balancing segment values to business unit, you must reconcile based on ledger. In this case, you will need access to all business units associated with the ledger to perform a thorough reconciliation.

Note: Implicit mapping means that no specific setup is used to assign the business unit to a primary balancing segment. This is a business decision, and your setup in Receivables should be such that the default accounting assigned to activities for that business unit should be the primary balancing segment value that was decided.

Accounts Receivable Financial Category

You must assign the financial category of Accounts Receivable to all of your natural account values with the Receivables account class. This is a required setup step for Receivables to General Ledger reconciliation. You perform this task under the Manage Chart of Accounts Value Sets activity.

Note: You must only assign the financial category of Accounts Receivable to natural accounts with the Receivables account class. No other account class should have this assignment.

If the financial category of Accounts Receivable isn't included in the chart of accounts setup, the Receivables to General Ledger Reconciliation report won't select any data. When you run the extract program, if you try to select general ledger natural account values that don't have this category assigned, the extract program displays an error indicating that the financial category wasn't assigned.

Once you assign the Accounts Receivable financial category, you can leave the Account parameter blank when you run the extract, in order to include all accounts that have the Accounts Receivable financial category in the ledger. You can alternatively enter specific natural account values to limit the report to reconciling only a subset of the Receivables accounts in the ledger, but these values must have the Accounts Receivable financial category assigned.

If you set up accounts for unidentified, unapplied, and on-account receipts, and on-account credit memos, you must also assign the Accounts Receivable financial category to these accounts in order to include them in reconciliation. If you want to exclude these accounts during reconciliation, then you must exclude them from the Account parameter, and both the Include On-Account Items parameter and the Include Unapplied and Unidentified Receipts parameter.

Caution: You must assign unique general ledger accounts to unidentified, unapplied, and on-account receipts, and on-account credit memos, to exclude them from reconciliation. Don't assign them the same Receivables accounts as that used for transactions, because the accounting for transactions would also be excluded, causing reconciling differences.

Profile Option Settings

Review the setting of these profile options:

• Reconciliation Data Purge Frequency

• Zero Amount Journal Lines Displayed

Use the Reconciliation Data Purge Frequency profile option to indicate the number of days to keep reconciliation extract data in the tables. Enter a value for the number of days needed to not lose prior extracts that you may need for comparison purposes.

Every time you run the extract program, it refers to the value of the Reconciliation Data Purge Frequency profile option. If there are any reconciliation data extract requests in the table older than the number of days specified in the profile option, these requests are purged.

For example, if a reconciliation data extract is run on January 1, and the value of this profile option is set to 30 days, then the data from January 1 isn't purged if you run another extract on January 29. However, the data is purged if you run another extract on February 1.

The Zero Amount Journal Lines Displayed profile option affects whether journal lines with zero amounts display in the Not Transferred to GL Detail report. If this profile option is set to Yes, the Summary report may equal zero and the detail report will list these zero amount journal lines. This doesn't prevent Period Close and doesn't cause reconciling issues as the net effect on the report is zero.

User Security

This section includes considerations for segment security and data access set.

Segment security applies to Detail reports only. If you don't have segment security access, then summary and detail report totals may not match.

Typically General Ledger users are secured by a data access set, and Receivables users by business unit security. This means that for the Receivables to General Ledger Reconciliation report:

• General Ledger users can see general ledger data for the balancing segment values in their data access set, as well as the Receivables and Subledger Accounting data for all business units linked to the ledger.

• Receivables users can see the Receivables and Subledger Accounting data for business units in their security definition, as well as general ledger data for all balancing segment values in the ledger.

However, if security is configured such that the data role for the General Ledger or Receivables job roles also have FND grants to specific business units for General Ledger users or specific data access sets for Receivables users, then the reconciliation report will only include:

• For General Ledger users, the Receivables and Subledger Accounting data for those business units in the ledger to which the user has access.

• For Receivables users, general ledger data for those balancing segment values included in the data access set to which the user has access.

This doesn't present a problem for the Receivables to General Ledger Reconciliation report if there is an implicit mapping between business units and balancing segment values. Users can simply filter the report for the balancing segment values that are mapped to the business units to which they have access, and the report should work properly.

However, if there isn't an intentional and implicit mapping between balancing segment values and business units, then this can cause the Receivables to General Ledger Reconciliation report to display undesirable results:

• For General Ledger users, the report will include general ledger data for all balancing segment values in the data access set, while Receivables and Subledger Accounting data are limited to the business units to which a user is granted access.

• For Receivables users, the report either won't include any general ledger data, or it will include general ledger data that isn't properly mapped to the Receivables and Subledger Accounting data for the business unit.

You can resolve this issue by removing the FND grants from specific business units for the General Ledger job roles, and from specific data access sets for the Receivables job roles.