What Is a Reconciliation Account in SAP?

by Marquis Codjia ; Updated September 26, 2017
SAP reconciliation accounts help users prepare accurate financial reports.

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."

Identification

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.

Significance

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.

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Expert Insight

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.

About the Author

Marquis Codjia is a New York-based freelance writer, investor and banker. He has authored articles since 2000, covering topics such as politics, technology and business. A certified public accountant and certified financial manager, Codjia received a Master of Business Administration from Rutgers University, majoring in investment analysis and financial management.

Photo Credits

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