Accrual reconciliations in SAP should be straight forward, but often this is not the case. As a result, they can become time consuming reconciliations that can hide unnecessary accruals that can 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 to 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 having supporting documentation attached to validate 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 – thereby ensuring the reversal is part of an automated month end process.

Performing the above activities can take time – especially if the accrual transaction volumes are large. Having an Automated Reconciliation Tool to help to manage these key checks is not only a massive time saver, but helps you reduce your risk. The BEST GL reconciliation module helps you manage your Accrual Reconciliations in SAP by providing the following reconciliation features:

  • As a standard in BEST GL Reconciliations, all line items are automatically categorised based on multiple factors pertaining to that specific document. In terms of an accrual, this is important because on the face of the recon, it can automatically be determined:
    • Which prior month Accruals have been reversed and which have not, and
    • 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 is still open for another month. The approver of the reconciliation can now 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 perhaps the approval of the reconciliation rejected.
  • By attaching supporting documentation to the reconciliation line items, or to the Reconciliation approval itself, the value of the accruals can be substantiated to ensure accuracy. This could be copies of invoices or even excel files of complex calculations. All supporting documentation is visible on the online SAP reconciliation, or part of the Audit Trail Report of the approvals.
  • The SAP Standard Accrual values are displayed on the BEST GL Reconciliation report; so the Reversal Reason Code and Reversal date is clearly visible to identify items that should have been reversed for 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 unreasonable time periods.

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

Watch our demo video and find out more about the BEST GL Recons Module here.

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