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Author's profile photo Abdullah Galal

Reconciliation Accounts and Special General Ledger Indicators (1/2)

This is an essential part of SAP Financial Accounting

What’s the meaning of Reconciliation Accounts? Why do we need them? and How are they used in SAP (with a live system demo)


When posting an invoice to a customer account, it should impact:

  1. The Customer Account balance: so we know how much we have to collect from this customer
  2. The total Accounts Receivables balance: so we can report in our financial statement how much money we are going to collect from all our customers

This same concept applies to all transactions posted to Vendors, Customers, and Fixed Assets


It’s also very important to know the difference between General Ledger and Subsidiary Ledgers, here’s a simple example:

  1. The total account of Accounts Receivables reported in our financial statements is a General Ledger Account
  2. The individual Customer Accounts are called the Customer Sub Ledger


One of the main features of SAP is its ability to update both the totals General Ledger Account and the individual Sub Ledger accounts simultaneously


Check this video where I explain in details the above business concept and how it’s applied in SAP


In the second part I’ll go into the more advanced topic of Special GL Indicators and why they are used, so stay toned


Thank you for reading and watching, see you in the next blog post.


Best regards,

Abdullah Galal

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      Author's profile photo Amrita Bhaumik
      Amrita Bhaumik

      The logic and the flow is explained very well in a simplified manner. Thank you Abdullah Galal for sharing. Looking forward to the nest video in the series!

      Author's profile photo Abdullah Galal
      Abdullah Galal
      Blog Post Author

      Thanks a lot Amrita for your comment and feedback! will post part 2 shortly

      Author's profile photo Muhammad Shoaib Tasleem
      Muhammad Shoaib Tasleem

      Well explained Abdullah Galal. Keep it up!