Accrual Reconciliations in SAP with BEST GL Recons

Accrual reconciliations in SAP should be straightforward, but often this is not the case. As a result, they can become time-consuming reconciliations that hide unnecessary accruals and overstate your month-end liabilities.

What should you be trying to achieve with your month-end accrual reconciliations in SAP? And how can the BEST GL Reconciliations module help facilitate this?

What Are the Main Reconciliation Objectives for an Accrual Reconciliation?

In terms of a generic accrual reconciliation, the following reconciliation actions are typically adopted:

• Ensure that previous month-end accruals are reversed in the current month.
• If a previous accrual is not reversed, ensure that this is for a valid reason and has been verified by the reconciliation accountant.
• Ensure that the current month’s accruals are accurate by attaching supporting documentation to validate the accrual values and calculations.
• In an SAP environment, you may also wish to ensure that accruals are captured using the SAP accrual functionality so that a reversal reason code and reversal date are provided, ensuring the reversal forms part of an automated month-end process.

Performing these activities can take time, especially if the accrual transaction volumes are large. Having an automated reconciliation tool to manage these key checks is not only a significant time-saver but also helps reduce risk.

The BEST GL Reconciliations module helps you manage accrual reconciliations in SAP by providing the following features:

• As standard in BEST GL Reconciliations, all line items are automatically categorised based on multiple factors relating to the specific document. For an accrual reconciliation, this means it can automatically determine:
  • Which prior-month accruals have been reversed and which have not.
  • Which current-month accruals have been reversed and which have not.
• All prior-month accrual entries that have not been reversed can be updated with a reason code and long text to justify why the accrual remains open for another month. The reconciliation approver can see which accruals have been verified and are required to remain on the reconciliation. Any prior-month accruals without a reason code can be queried and the reconciliation approval rejected if necessary.
• By attaching supporting documentation to the reconciliation line items or the reconciliation approval itself, the value of the accruals can be substantiated to ensure accuracy. This could include copies of invoices or Excel files containing complex calculations. All supporting documentation is visible on the online SAP reconciliation and included within the approval audit trail report.
• The standard SAP accrual values are displayed on the BEST GL Reconciliation report. The reversal reason code and reversal date are clearly visible, making it easier to identify items that should have been reversed by a prior date.
• If accruals are raised for longer periods, ageing can be used to ensure that items are not left in the account for an unreasonable length of time.

By using automated categorisation of accrual line items and additional reconciliation tools, managing accrual reconciliations in SAP with BEST GL Reconciliations saves time while increasing accuracy and reducing risk.

Watch our demo video and learn more about the BEST Balance Sheet Recons module.

Contact BEST to find out how the BEST GL Reconciliations module can help manage your accrual reconciliations in SAP.