Automate Your Intercompany Reconciliation Process in ECC

  • by Srihari Subramaniam, Manager, Capgemini US LLC
  • October 15, 2007
SAP ERP Central Component (ECC) includes more robust functionality for intercompany reconciliation during period-end closing. The reconciliation ledger helps to reconcile balances between companies and tags disputed or follow-up items. See how the intercompany reconciliation process works and how to handle the differences.
Key Concept

An intercompany process can be any of following:

  1. Intercompany posting within the G/L using transaction OBYA (cross-company code postings)
  2. Intercompany posting through FI/CO posting during allocations
  3. Intercompany posting through sales order intercompany billing to the G/L for drop shipment (e.g., an intercompany sales order where the selling company drops shipment)
  4. Intercompany posting through stock transport purchase order for material transfer

The system reconciles all of these transactions between companies during month-end.

During month-end closing, one of the most challenging tasks for any company is reconciling intercompany balances to zero. Accountants need to find the documents that cause intercompany differences, follow up, and make adjustments. I’ll show you how to use SAP functionality to reconcile the intercompany balance automatically and find those documents causing the difference. I’ll also explain how to handle unreconciled documents, mark those documents with actions taken, and post an adjustment entry. These actions should speed your month-end account closing.

The intercompany reconciliation process in SAP ERP Central Component (ECC) enables faster reconciliation of balances between companies. The configuration and program that I’ll talk about are entirely new to ECC 6.0. ECC includes some major changes from previous releases, including:

  • Data collection. You can collect open items posted between partners of a corporate group from SAP and from non-SAP systems. ECC features reconciliation between the G/L, G/L with open item, and customer/vendor as separate processes.

  • Rule-based assignment. You can set up rules that automatically assign intercompany documents based on certain fields.

  • Data presentation. ECC includes a user interface geared toward finding the reasons for intercompany differences and supporting communication between accountants involved in the reconciliation process. It also automatically displays documents whose relationships could not be automatically determined or documents that contain posting errors.

I’ll explain the transaction and associated configuration for setting up an intercompany reconciliation process. My example uses an intercompany transaction between company codes 1002 and 1004. Figure 1 shows the three basic steps required for intercompany reconciliation.

Srihari Subramaniam

Srihari Subramaniam is an SAP manager at Capgemini US LLC, with 14 years of experience in SAP consulting. He has thorough knowledge in the integration of SD, MM, FI/CO, POS DM and PP. Srihari has worked in projects for industries such as high-tech manufacturing, telecommunications, chemical, retail (IS-R), and apparel.

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