Difficulty Learning Vendor and Customer Reconciliation in SAP FICO: A Practical Approach to Building Confidence
SAP FICO (Financial Accounting and Controlling) is one of the most popular modules of SAP ERP and used in companies for recording financial transactions, accounts, and reporting. Vendor and Customer reconciliation is one of the most critical features of SAP FICO; many new SAP FICO aspirants struggle with reconciliation as they are unable to understand how reconciliation is done, what is its need, and its impact on financial statements.
Vendor and Customer Reconciliation Vendor reconciliation is the process of comparing each individual vendor and customer account transactions to the respective balances in the general ledger. Vendor reconciliation is a complex topic to understand initially, but we simplify things for you with exercises and examples based on actual business situations.
You learn with guidance and training at every step through Seven Mentor SAP FICO, which will build your skill set and knowledge confidently to eventually analyze reconciliations in accounting.
1. What is Vendor and Customer Reconciliation?
Vendor reconciliation vs customer reconciliation - here's how you can understand why you should learn about vendor reconciliation vs customer reconciliation.
SAP FICO – Vendor Accounts vs Customer Accounts What is Vendor Account & Customer Account? In SAP FICO, vendor accounts are the amount of money that you need to pay to the vendor, and customer account is the amount of money that the customer needs to pay to you. These accounts are sub-ledger accounts and are attached with a reconciliation account to the general ledger.
For example:
The vendor is liable for vendor liabilities when a supplier extends credit to a company for goods or services sold.
As soon as the customer who paid with credit bought an item from the company, it was recorded.
Account balances are corrected if we receive payment or if we make a payment.
Familiarizing students with these elementary relationships allows them to gain insight into flow of cash through SAP.
2. Difficulty Understanding Reconciliation Accounts
Reconciliation accounts and the associated supplier and customer sub-ledgers are also tricky learning areas.
Novices cannot understand how each vendor and each customer transaction updates the relevant general ledger balances.
This is made abundantly clear when you make learners aware that reconciliation accounts link sub-ledger accounting with general ledger accounting. The accounting has been devised as a way to assist businesses in confirming that the balances in an individual accounts agree with the business accounts.
Conversely, exercises, transaction samples and simple instructions can help the students to experience that link more concretely.
3. Get to Know the Vendor Reconciliation Workflow
Reconcile supplier transaction and payable.
Initially, students have difficulty understanding how vendor account balances are affected by invoice, debit note, credit note and outgoing payment transactions.
For example, when a vendor's invoice is received, the payable from an invoice are posted to the vendor account and when paid, the accounts payable liability decreases.
In order to learn how to do this, students need to practice:
Creating and maintaining vendor master records.
Recording vendor invoices.
Posting outgoing payments.
Understanding open and cleared items.
Reviewing vendor account balances.
Identifying differences in supplier transactions.
With a consistent practice, learners learn the whole cycle of vendor accounting.
4. Customer Reconciliation Introduction
Customer reconciliation verifies transactions with customers and updates receivables.
Beginners could be confused with the connection between the customer invoices, incoming payments, credit memos and balances.
For instance, if the business sells a product on credit, the amount paid for it becomes receivable from the customer. The receivable amount diminishes as the customer clears off the balance.
Practice: Customer invoices posting, incoming payments, Clearing open items, viewing Customer balances: it will support them in practicing the various processes.
A more detailed understanding of these activities also helps learners to develop a sound foundation in delegates monitoring.
5. Vendor versus Customer Reconciliation Differences
Vendor and customer reconcileings are based on the same accounting principles. But their business motives are different.
Vendor Reconciliation
Customer Reconciliation
Similar to accounts payable
Related to accounts receivable
Track the amounts payable to suppliers
Customer receivables
Inludes outgoing Payments
Includes incoming payments
Assists with managing supplier liabilities
Assists in handling customer balances owed
Being aware of this differences will assist you to get the right procedure while closing the SAP dealings.
6. Significance of Practical Coaching in SAP FICO
Although theoretical ideas help but SAP FICO is less complicated, if the student has a real world business case to work on.
You want the learners to understand what the transaction is, what transaction code they will be using and for what purpose.
These practice exercises may include:
Recording supplier invoices and payments.
Posting customer invoices and receipts.
Checking vendor and customer balances.
Understanding open-item management.
Performing account clearing activities.
Reviewing reconciliation account balances.
Identifying and resolving common posting differences.
Seven Mentor SAP FICO classes provide the opportunity for students to simultaneously understand SAP functions and accounting concepts with proven history lessons and case studies.
7. Why Choose Seven Mentor SAP FICO course in pune for Structured Learning?
If you are want to learn about SAP FICO then good background knowledge of accounting, have experience working in SAP and good working knowledge of SAP would be advantages for you. Taking a very good SAP FICO training course can be really helpful.
Seven Mentor Learning how to learn SAP with the help of our trained teachers and learning activities.
Let's have a look on SAP FICO Course in mumbai by Seven Mentor SAP Financial Accounting Training for the learners who are very much eager to learn SAP financial accounting.
Conclusion
Vendor / Customer Reconciliation SAP FICO forms a part of the overall needs of a business organization for correct handling of payable and receivable accounts. For a novice, the following terms – reconciliation accounts, open items, clearing transactions – seem complicated and can be a hard-to-understand terminology. With time, they are quite simple to use.
SAP FICO trainer with real life scenarios, exercises, and simple accounting fundamentals offer a confident SAP FICO training.
