Reconciliation Types

Chart of Accounts Level or Ledger Level

You can define reconciliation types at a chart of accounts level or at a ledger level. Chart of accounts level reconciliation types apply to all associated primary and secondary ledgers that are enabled for reconciliation. For ease of maintenance, define reconciliation types at the chart of accounts level.

If a ledger requires reconciliation rules that vary from the associated chart of accounts' rules, you can specify the ledger when creating the reconciliation type. You can select from among the primary and secondary ledgers enabled for clearing accounts reconciliation that use the chart of accounts you selected.

The Manage Clearing Accounts Reconciliation page automatically displays all reconciliation types, whether defined at a chart of accounts level or a ledger level.

Note:

If you submit the automatic reconciliation process for all reconciliation types, the process reconciles ledger-specific reconciliation types first, followed by chart of accounts level types.

Reconciliation Type Names

Use unique names for reconciliation types. Maintaining a consistent naming convention is recommended. Consider appending the chart of accounts or ledger name as a suffix to distinguish between chart of accounts level and ledger level definitions. Following this convention helps you identify the appropriate definitions on the various reconciliation processing pages. This practice also helps to keep reconciliation type names unique within the application, and across ledgers and charts of accounts.

Account Matching Rules and Account Filters

When you create a reconciliation type, you must select an account matching rule. The account matching rule identifies the chart of account segments that are significant for finding matching journal lines during the reconciliation process. Conversely, the selection implies which segments are insignificant and irrelevant during the reconciliation process. Those irrelevant segments aren't considered when grouping and matching eligible journal lines that are reconciled together.

The account matching rules are:

By Primary Balancing Segment, Natural Account
By Primary Balancing Segment, Natural Account, Cost Center
By Account Combination

After you select the account matching rule, use the account filter to specify the segment values that belong to valid clearing account combinations. You would typically specify segment values only for those segments that are part of the account matching rule that you selected. At a minimum, you must specify a value for one of the segments. Most likely, you would provide a value for the natural account segment. If you don't specify values for a segment, the reconciliation process considers all of the underlying child values for that segment as valid values in a clearing account combination, when matching and grouping together related journal lines.

If you specify values for a segment that's not part of the account matching rule, journal lines across the specified values for that segment are reconciled together.

For example, a chart of accounts has the following segments and child values:

Company: Primary balancing segment values of 01, 02, 03
Cost Centers: 000, 100, 200
Natural Accounts: Range of 00000 - 99999
Products: 100, 200

The chart of accounts is used by the Vision Services (USA) ledger, which has been enabled for reconciliation. The reconciliation type has the following attributes:

Name: Approved Claims
Account Matching Rule: By Primary Balancing Segment, Natural Account
Account Filter:
- Cost Center: 100 to 200
- Natural Accounts: 22100 to 22101

This table shows how the process groups the journal lines together for matching and reconciliation, for the Vision Services (USA) ledger and the Approved Claims reconciliation type.

Set 1	Set 2	Set 3	Set 4	Set 5	Set 6
01-100-22100-100	01-100-22101-100	02-100-22100-100	02-100-22101-100	03-100-22100-100	03-100-22101-100
01-100-22100-200	01-100-22101-200	02-100-22100-200	02-100-22101-200	03-100-22100-200	03-100-22101-200
01-200-22100-100	01-200-22101-100	02-200-22100-100	02-200-22101-100	03-200-22100-100	03-200-22101-100
01-200-22100-200	01-200-22101-200	02-200-22100-200	02-200-22101-200	03-200-22100-200	03-200-22101-200

In this example, the journal lines are grouped together into six sets. Because the account matching rule is By Primary Balancing Segment, Natural Account, each primary balancing segment value (01, 02, 03) is combined with each natural account segment value that's in the account filter (22100, 22101), into its own set.

Since the product segment isn't part of the account matching rule or account filter, each set includes all of the product segment values (100, 200).

Lastly, the cost center segment isn't part of the account matching rule, but it's included in the account filter. The cost center segment values are 000, 100, and 200, but the account filter specifies only 100 and 200. This means that the journal lines eligible for reconciliation are limited to account combinations with cost centers 100 and 200. And, since the cost center isn't part of the account matching rule, each set includes journal lines containing both cost centers 100 and 200.

In summary, even though the following account combinations include primary balancing segment values 01, 02, and 03, and natural account segment values 22100 and 22101, they're excluded from the reconciliation because the cost center is 000.

01-000-22100-100
01-000-22100-200
01-000-22101-100
01-000-22101-200
02-000-22100-100
02-000-22100-200
02-000-22101-100
02-000-22101-200
03-000-22100-100
03-000-22100-200
03-000-22101-100
03-000-22101-200

Reconciliation Start Date and Last Automatic Reconciliation Run

Every reconciliation type has a reconciliation start date. The reconciliation start date, and the criteria you specify when reconciling automatically or manually, are used to retrieve the clearing account journal lines eligible for reconciliation. Only journal lines with an accounting date after the reconciliation start date are available for reconciliation.

The Manage Clearing Accounts Reconciliation page displays the date of the last successful automatic reconciliation run. You can use this date to track and monitor completed and pending reconciliations. Clearing accounts reconciliation, as an integral part of period close activities, can be planned accordingly.

Tolerances for Manual Reconciliation

You can set up amount and percentage tolerances for manual reconciliation. When the net accounted amount of the journal lines is within the tolerance, the lines can be reconciled together using manual reconciliation. If you:

Leave both the amount and percentage tolerance fields blank, then there is no tolerance.
Specify a value in one of the two tolerance fields, that amount or percentage becomes the applicable tolerance.
Specify both an amount and a percentage, the stricter of the two tolerances is applied.

The percentage tolerance is calculated on the higher of the grouped journal lines total debit or credit amounts. The amount tolerance is based on the absolute amount in the ledger currency.

Changes to Reconciliation Types

You can change the reconciliation type name, description, tolerance percentage or amount, reconciliation start date, and whether the reconciliation type is active. The edited reconciliation type becomes the applicable definition for any future reconciliation processes subsequent to the edit. Existing journal line groups that were already reconciled aren't affected by the changes. You can still reverse groups that were previously reconciled.

Inactive Reconciliation Types

Inactive reconciliation types are ineligible for automatic and manual clearing accounts reconciliation processing, starting from the moment they're inactivated. Also, the submission page for the Unreconciled Transactions report doesn't display inactive reconciliation types as a report parameter. You can however, use inactive reconciliation types when submitting the Reconciled Transactions report, as well as on the Reverse Reconciliation page.