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Syed Usama
April 30, 2021 6 minute read

Intercompany Reconciliation (Customer/Vendor)

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1. Introduction
2. Trading Partner
3. Bene ciaries of Intercompany Reconciliation
4. Process of Intercompany Reconciliation
5. Scenarios
6. Conclusion

Introduction:

The purpose of intercompany reconciliation is to facilitate the organization for group level reporting. Today, the
graph of industries with their subsidies are increasing on global level resulting, the huge amount of transactions
are being generated between the subsidy and it parent company or between two parent companies.

Group accountant can control the documents of accounting transactions daily, weekly and periodically between
the group of companies through ICR. It can be possible to get the data from  SAP or from the external system
i.e. if any company is using any other ERP.

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It is working on the level of company or partner company in SAP.

The main problem is to reconcile the receivable and payable data between the inter company trading partner
because of the massive load of transactions which is obviously very time consuming and challenging work.

ICR can be run at any time especially when an accountant does month end closing or year end closing activities
. It may help to avoid the pressure and the results are generated as per the desired con gurational parameters.

Trading Partner:

This is the term which we use for the business partner with in the group of companies or from any other group
of companies with whom we do business or generating any sort of payable and receivable.

Trading partner is maintained in eld VBUND in Business Partner ;

Bene ciaries of Intercompany Reconciliation:

1. The accountants from one legal entity who are generating payables and receivables to the other legal entity
with in the group of companies or have same trading partner.
2. The accountants from the legal entity who are generating payables and receivables to the other legal entity
of di erent group of companies or we can say they have di erent trading partners.
3. Group accountant who should has a true picture of companies with in the group or out of the group.
4. Parent company can manage it globally to check the results.
5. Subsidy company can also get the advantage of it that how many documents are unreconciled between their
parent company.

Processes of ICR:

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1. Process 001 (GL Open Items) We use it when company posted most of it intercompany receivables and
payables on GL accounts.
2. Process 002 (GL Accounts) We use this process for GL accounts which are not open item managed or for
Pro t and Loss accounts.
3. Process 003 (Customer/Vendor Open Items) We use this when company posts most intercompany
receivables and payables in customer and vendor accounts

Scenarios:

Di erent group of companies have di erent scenarios as per their need an requirement but here we discuss
some of the most happening scenarios which take time in reconciliation in that we will see how ICR makes our
life easy and below is process 003 because most of the intercompany transactions are based on customers and
vendors accounts.

1. ICR b/w di erent company codes with in the group of companies or same trading partner.
2. ICR b/w company code of di erent group of companies or di erent trading partners.

Now please check the scenario and it’s con gurational step to perform ICR;

1. ICR b/w di erent company codes with in the group of companies or same trading partner.

We have two company codes NP02 and BU01 of the same trading partner B1000 or from same group of
companies.

These company codes have a relation of customer and vendor with  each other. So, Accounting transactions will
be;

In case of selling NP02 to Sell to BU01 and records;

BU01 Dr  xxx

Sales Cr xxx

at the same time BU01 records the purchasing

Purchases Dr xxx

NP02  Cr xxx

but the payment is due from BU01 till the period end so at this point of time the accountant will run the ICR
process in SAP but before that we will generate the purchase  documents in CoCo. BU01

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and the same time the accountant from NP02 will book the receivable against BU01.

Now the group accountant want to know the NP02 receivable against BU01 so the accountant will the run
process in three steps :

1.  FBCSI3 to select the documents

2.  FBCIA3 to assign the documents automatically
3.  FBCIR3 to assign the documents manually

First we run the t-code FBCSI3 for the selections of the documents

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after the execution accountant will the document for assigning in two di erent company codes

In the above picture we can see that two documents are assigned and transferred for automatic assignments in
ICR of the same trading partner.

In the second step we run the t-code FBICA3 for automatic assignments b/w company codes in ICR

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After the execution system will automatically assign the matched documents by matching the reference elds
which we de ne in customizing

In above picture it is seen that two records are matched automatically if anything is left so we assign it manually

In the 3rd step we check the assigned documents and assign manually anything is left from t-code FBICR3

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Execute it

In the above picture we can see that two of our above documents are now assigned with the group account
document number. So , the group accountant can easily get the reconciliation and some of the documents are
now showing for manual reconciliation.

1. ICR b/w company code of di erent group of companies or di erent trading partners.

In the second scenario we are considering BU01 from company B1000 and NP02 is from B2000 so here the
pattern of accounting entries would be the same which already discussed above. But we will check how the
reconciliation would be done .

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But in Business partner we will change the trading partner by assuming that the customer 4200003 is of NP02
which is belong to B1000.

Similar in the case in BU01 that NP02 is the vendor of BU01 so the trading partner would be B2000

Accounting Entries in NP02

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Accounting Entries in BU01

Now we the process b/w di erent trading partners would be run and assigned .The t-code would be same but
the selection parameters would be like for e.g. FBICS3 (Select Document)

After the execution all the documents from di erent trading partner are selected

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In the above picture it is shown that documents from trading partners are selected to assigned in the next step
which in FBCIA3 automatically assignment

After the execution assignments would be done

In the above picture 4 documents are assigned automatically of B1000/B2000 left document will assigned
manually from t-code FBICR3

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After the execution of the above parameters we can get the assigned and un assigned documents

Note: in our scenario the data would be mapped through the reference eld i.e. INV#922 in the eld above ,
accountant from both the companies would input the same number to reconcile the data.

Conclusion:

Hence, Intercompany reconciliation is now get easy and done e ectively and the process is also time saving for
the companies.

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Alert Moderator

Assigned tags

FIN (Finance) | FIN Accounts Receivable and Payable | Salman Ali Akber |

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