What Is a Reconciliation Account in SAP?

German enterprise solutions provider SAP sells financial management software to large organizations, enabling clients to prepare accurate accounting reports in real time. SAP stands for "Systems, Applications and Products."

A SAP reconciliation account is a general ledger account that receives postings from subsidiary ledgers. A ledger is a two-faceted accounting form that enables bookkeepers to record transactions by posting debits and credits in financial accounts. A general ledger has multiple subsidiary ledgers. For example, a corporate accounts receivable general ledger may have three subsidiary ledgers related to Customer A, Customer B and Customer C. Financial accounts are assets, liabilities, expenses, revenues and equity items.

For SAP financial accounting users, reconciliation accounts are important tools financial accounting and reporting processes. The application allows users to prepare, in real time, accurate financial data sets, such as balance sheets, income statements and statements of cash flows.

An organization may bring in a specialist, such as a certified public accountant, to implement SAP financial accounting in corporate operating processes. The CPA also may advise on how to set up reconciliation accounts in the SAP application.