Professional Documents
Culture Documents
Transaction with customer needs to be recorded in account books. With each transaction with customer,
account receivable may decrease or increase. Hence each customer is to be linked with GL account (account
receivable). Whenever transaction with customer is entered, corresponding GL account mapped with customer
is posted.
Scenario 1:
Each customer is mapped with a different GL account.
Now if company has 1000 customer, then 1000 different GL accounts will be needed. This increases the
number of GL account in chart of account. When number of GL account in chart of account increases,
difficulty to manage the accounts increases as well.
Hence, we try to achieve the objective of mapping customer to GL account while keeping number of GL
accounts as low as possible.
Hence this approach of mapping each customer to a different GL account is not used in sap.
Scenario 2
Multiple customers is mapped to same GL account.
Hence, when customer transaction is entered, corresponding customer recon account is posted. Since multiple
customers are mapped to same GL recon account hence required number of GL accounts is reduced to a great
extent. This reduces the size of chart of account.
Net balance of customers (C1, C2, C3, C4 & C5) should be equal to net balance in GL customer recon
account.
Hence, net balance of customers (sub-ledger) should always reconcile with net balance in GL recon account in
finance (main ledger).
Hence, GL account mapped to customer is called reconciliation account or recon account.
Recon account cannot be directly posted. Recon account is automatically posted when posting to customer
happens.