Reconciling SAP Bank Accounts

Reconciling SAP bank accounts to a physical bank account balance and statement can be a time consuming process.

BEST provides an SAP add-on module for GL Reconciliations that reconciles all manner of GL (General Ledger) accounts including SAP bank reconciliation.

There are essentially two parts to the BEST bank reconciliation in SAP.

  1. Bank Reconciliation In SAP of the Main Bank Account

Firstly a 3 way match of the main GL bank account in SAP, to the bank statement balance in SAP, then to the physical bank account statement balance. This ensures that the main SAP bank account balance is both accurate and complete. The reason for the 3-way bank balance check is that it is common for bank statements, or bank statement transactions, to be missing in the SAP bank accounts, which the 3-way check will identify.

For example, bank statements are loaded electronically into the SAP bank tables and posted to the SAP Bank Main GL Account. However, there may be missing or late statement files – or there may be a technical SAP bank interface error. During the month end close (or more frequently, as some bank reconciliations are done daily or weekly), obtaining a physical bank statement via post, email, online – and comparing this balance to the balance in SAP is therefore a good check. If a user enters this external bank balance into BEST, the system will compare it to the balance in the bank statement header table (FEBKO) and the balance of the Bank Main GL Account for that bank account in SAP. The physical bank statement file should also be attached as substantiating documentation.

2) Bank Reconciliation In SAP of the Sub Bank Accounts

The second part of the bank reconciliation is the open items on the bank sub accounts in SAP. When the bank statement is posted to SAP, the bank statement line items are posted as open items to the bank sub accounts. When outgoing payments (for example when paying vendor invoices in SAP) or incoming payments (for example when receiving payments for customer invoices in SAP) are posted in SAP, a contra entry is posted as an open item to the bank sub accounts. Automated clearing in SAP – using BEST’s GL Clearing module if required (general-ledger-clearing-in-sap) – should clear these open items against the bank statement open items. For various reasons, open items may not yet be cleared on the bank sub accounts. For example, the payment references between SAP and the bank statement are not aligned, or there may be timing differences. These unmatched or uncleared items are reported on the bank reconciliation. Users may provide reason codes, texts or attachments to substantiate why items are not yet reconciled. Ageing reporting identifies long outstanding items.

The above tools allow for quick identification of SAP bank reconcilion issues. It also makes the reconciliation process in SAP quicker and easier, with all the relevant information being available online in SAP with real-time status updates.

As BEST is in SAP, it links the main bank account(s), sub bank account(s), SAP bank statement tables, external bank balance and any attached supporting documentation such as the bank statement, into one automated and consolidated bank reconciliation report, all within SAP itself.

Once a SAP bank reconciliation is completed and fully approved, all the relevant reconciliation information is available in SAP as part of the BEST management reporting, such as:

  • Online bank reconciliation report – for both current and historic versions,
  • All supporting documentation attached at the time of approval,
  • All approval actions performed via the Audit Trail Report – such as approvals, rejections, entered bank balances and reason codes,

By combining the tools within the BEST GL Recons Module with the specific recon objectives inherent to the different accounts involved with an SAP bank reconciliation, the bank reconciliation in SAP can now be:

  • performed quickly and efficiently,
  • performed ensuring the balances are complete and accurate,
  • completed with online reconciliations available for both current and historic recons,
  • completed with a full online audit history of activities performed.

Neil Pryce from FinOwl, a BEST partner, is a rare bank and SAP subject matter expert with a career of some decades spanning auditing as a chartered accountant, as a SAP Financial consultant on large global projects and as a chief operating officer at ABSA Corporate / Barclays. He is now the driving force behind FinOwl, a consultancy to assist large corporations manage treasury, improve cashflow and streamline banking (of which reduced bank charges are an essential element).

Here is Neil’s article, which is well worth the read for all accountants that work with SAP and particularly personnel who need to reconcile bank accounts during the month-end close process:

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