Resolving Reconciliation Exceptions

This chapter provides an overview of reconciliation exceptions and discusses how to process reconciliation errors and exceptions.

Understanding Reconciliation Exceptions

When you automatically reconcile bank statements, some bank transactions may not perfectly match system transactions. In these cases, you must analyze the transactions that did not match and determine the source of the errors. Typically, mismatches are due to bank errors in reference IDs (for example, check numbers, amount mismatches, transaction type mismatches, duplicates, items not found, and transactions for which the currency has not been defined at the bank account level).

When you use tolerances to reconcile transactions, the process inserts the differences that are associated with the transaction into the BNK_RCN_TRAN table. You view these differences on the External Transactions page. The system assigns the new lines a unique reference number that begins with BSP (bank statement processing) or whatever has been assigned in the auto numbering, plus a sequential number.

The Cash Management Bank Statement Accounting functionality works similarly to the reconciliation exceptions functionality. When an NTF or MSC exception is matched to a BSA rule (with an accounting template), the system reconciles the exception and inputs an external transaction with a unique reference number into the BNK_RCN_TRAN table.

After you determine the source of the errors, you have several options, depending on the type of mismatched information:

If the reference number that is sent by the bank does not match any reference numbers in the system, the transaction is considered an AutoRecon error.

The Auto Recon Errors report lists all automatically reconciled errors. You can reconcile these transactions using automatic or manual methods.
- To automatically reconcile these transactions, force reconciliation using the Automatic Reconciliation Exceptions page. If the transaction matches the system processing criteria for automatic reconciliation, the system creates the necessary system-side transaction, then reconciles the pair.
- To manually reconcile these transactions, you must create an external transaction and reconcile the pair using the Semi Manual Reconciliation page.
  
  Note. If you are using the above method to manually reconcile transactions, it is your responsibility to use the correct accounting template when creating the external transaction to keep your organization's ledgers balanced.
Unpaired transactions are generally third party external transactions that exist outside your organization's PeopleSoft system. These might be from a legacy system in your organization that reports these transactions to the bank. As the legacy system is not integrated with your organization's PeopleSoft system, when you receive the bank statement, these transactions do not have a matching system-side transaction in the PeopleSoft system. However, if you map third-party external transactions (meaning that you configure the application to automatically load all external transactions using statement activity types), the force reconciliation process inserts the corresponding system-side transaction into the system when you force reconcile.

The system generates the accounting entries based on the accounting template that you assigned to the statement activity type (if you assign an accounting template). This can apply to only the first notice of items (such as fees and interest) from the bank that are not yet in the system.
If the reference number that is sent by the bank matches a reference number in the system, but the transaction codes, amounts or dates do not match, the transaction is an AutoRecon Exception.

The AutoRecon Exceptions report lists all reconciliation exceptions. You can force any exception transaction to reconcile despite the discrepancy on the AutoRecon Exceptions page. The system creates external transaction offset entries when a transaction meets the following two conditions: the transaction is defined with a valid statement activity type, and this statement activity type is defined with the BNK_RCN_TRAN transaction table.

When you pair a transaction, it forces reconciliation on the bank side and the system side. When you select only one transaction (you did not pair the transaction because it was not listed on the Recon Exception page), you must manually add the appropriate journal entries for the transaction after you force-reconcile the selected transaction.
If the reference number that is sent by the bank matches a reference number in the system, but the amounts do not match, the transaction is also an exception.

You have two options to resolve the problem:
- Change the amount for the reconciliation tolerance for the bank account so that the transaction reconciles, and then run the Bank Reconciliation process (FSPRECON) again.
  
  The system generates the appropriate journals.
- Make an adjustment entry on the system side and use the Semi Manual Reconciliation page to reconcile the transactions.

See Also

Setting Up Reconciliation Tolerances

Defining Statement Activities

Reconciling Externally Generated Transactions

Reconciliation Exceptions Workflow

If you have implemented the Exceptions workflow when you run the Reconciliations Exceptions process (TR_RECON_EXC), the system automatically routes any exceptions to a defined user (or user's) worklist.

See Also

Routing Exceptions to a User's Worklist

Delivered Workflows for Banks Setup and Processing

Processing Reconciliation Errors and Exceptions

This section discusses how to:

Route exceptions to a user's worklist.
Run error and exception reports.
Force exceptions to reconcile.
Resolve exceptions using semi-manual reconciliation.
View accounting for forced reconciliations.

Prerequisites

If you plan to route exceptions for automatic reconciliation to a user's worklist, you must first selectEnable Workflow for the bank account on the Account Reconciliation page.

See Also

Selecting a Reconciliation Method

Pages Used to Process Reconciliation Errors and Exceptions

Page Name	Object Name	Navigation	Usage
Route Reconciliation Exception	TR_AE_RUNCNTL	Banking, Analyze Exceptions, Route Reconciliation Exception	Route exceptions to a user's worklist. Define the run parameters for the Reconciliation Exceptions process.
Automatic Reconciliation	BNK_RCN_CYC_STSA	Banking, Reconcile Statements, Automatic Reconciliation	Determine whether a bank statement has reconciliation errors. Run the Auto Recon Errors report (FIN3002). Use this report to view a list of all reconciliation errors for a bank statement. Run the AutoRecon Exceptions report (FIN3001). Use this report to view a list of all transactions with exceptions for a bank statement.
Automatic Reconciliation Exceptions	BNK_RCN_VUE_UNR	Banking, Analyze Exceptions, Automatic Reconciliation Exceptions Click Exceptions on the Automatic Reconciliation page.	Click to force an automatic reconciliation exception transaction to reconcile despite discrepancies. You can also create external transactions for bank side transactions with no corresponding system side transactions.
Semi Manual Reconciliation	BNK_RCN_SEMI_MAN	Banking, Reconcile Statements, Semi-Manual Reconciliation	Resolve exceptions using semi-manual reconciliation. Select a transaction on the system side to match a transaction on the bank side.
Bank Statement Processing Accounting (BSP)	TRA_EVENT_CAL_2	Cash Management, Treasury Accounting, Accounting Events Select the BSP Accounting Events tab.	View the accounting events that are scheduled for force-reconciled transactions.
Recon Transactions by Account	BNK_RCN_ALL_GEN	Banking, Analyze Exceptions, Transactions by Account	Search and review transaction reconciliation information by a defined bank account. You can also run the Account Register report (FIN4004).

Routing Exceptions to a User's Worklist

Access the Route Reconciliation Exception page.

Select a bind variable name of either BNK_ID_NBR or BANK_ACCOUNT_NUM and enter a value.

Running Error and Exception Reports

Access the AutoRecon Manager page.

Select either Errors or Exceptions in the Reports field, and then click Go.

See Also

Reconciling Transactions Automatically

Forcing Exceptions to Reconcile

Access the Automatic Reconciliation Exceptions page.

The page displays a combination of all potential matches based on date, amount, and reference ID number. Use your own judgement when you force-reconcile items. In some cases, transactions appear multiple times after being force-reconciled, so you must be careful that you select the correct reconciled combination.

Search Criteria

If you access this page by clicking the Exceptions link on the Automatic Reconciliation page, the exceptions for the selected bank's statements automatically appear in the grid. Otherwise, you must enter your search criteria and click Search.

Search By

Select how you want to search for transactions: by reference number or by date. The fields in the Search Criteria group box vary based on your selection.

Auto Reconciliation Exceptions

For the system to force-reconcile a transaction, the transaction must match the following criteria. If the transaction does not match this criteria, the Force Reconciliation option is unavailable.

Note. This criteria is only applicable if you are using a Treasury application. If you are using the PeopleSoft force-reconciliation functionality with Payables or Receivables, the Force Reconciliation check box is always enabled.

You must have installed one or more of the Treasury applications, such as Cash Management, Deal Management, or Risk Management. The force reconciliation functionality uses statement activity types for storing the accounting template and the source table (BNK_RCN_TRAN) information, from which the system creates the offset entries However, the ability to define statement activity types is available only if you install a Treasury product.
The bank statement transaction must have a valid statement activity type on the Bank Transaction Entry page.
You must populate all three fields for the statement activity type that is associated with the bank statement transaction in the Force Reconciliation Options region of the Statement Activity Type page. These fields are Allow Force Reconciliation, Transaction Table, and Accounting Template ID.
You must select the Statement Accounting option on the External Accounts page must be selected. This ensures that the correct ChartFields for first notice items, such as fees and interest, are established. In addition, when the system creates the offsetting external transaction, it sets the internal Build Accounting status to yes. This ensures that these transactions are properly built during the next Automated Accounting process (TR_ACCTG) run.

In addition, when force-reconciling transaction pairs of unlike amounts, the system automatically generates a balancing transaction. For example, if the bank statement amount is $100 USD and the system transaction amount is $99.99 USD, then the system creates a balancing transaction, which results in a credit in the amount of $0.01 USD. This credit is recorded in the table that is specified in the associated Statement Activity Type definition (either BNK_RCN_TRAN or CASH_FLOW_TR). If the system transaction is of a greater amount than the bank statement amount, then the system creates a debit and records it to the appropriate table. Using the example above, if the bank statement amount is $100 USD and the system transaction amount is $100.01 USD, then the balancing transaction is a debit of -$0.01 USD.

In the Description field for each exception, details from the bank transaction file appear along with the reason that the transaction did not reconcile. Possible values are:

Alignment Check	Payables check that is used to align printer.
Amounts Not Equal	Bank amount does not match system amount.
Ambiguous Match	An unreconciled, bank-statement transaction could match to more than one unreconciled system transaction. This occurs most frequently when there is are large tolerances defined for the amount or date. An ambiguous match could also occur even with zero tolerances defined, however, if the reference ID's do not match.
Currency	The transaction currency was not defined ( Accounts Receivable only).
Currency Not Defined	The transaction currency was not defined at the bank account level.
Duplicate Input Transaction	Duplicate bank transaction. A transaction appears more than once on a given statement with the same date, amount and reference ID. (AR Deposits are an exception to this— Duplicate transactions are transactions that appear more than once on a given statement with the same date and amount (AR Deposits do not use ID's for matching).
Duplicate Transaction	Duplicate system transaction.
Miscellaneous Transaction	Miscellaneous transaction, such as bank fees or interest.
Payee Names Not Equal	Payee names don't match.
Not Found In System	Transaction is not found in the system.
Null Transaction ID Ref	Blank transaction ID.
Overflow	Overflow Payables check.
Pending Reconciliation	Pre-reconciled.
Reconciled	Already reconciled.
Reprinted Check	Reprinted payables check.
Stop Check	Check was issued a stop payment to the bank.
Wrong Transaction Type	Wrong transaction type for source.
Tran Date Different <> Bank Clear	System transaction date is different from the bank clear date.
Unreconciled	Not processed by the Bank Reconciliation process.
Voided Check	Payables void.

To force a transaction to reconcile, select the transaction and click Reconcile.

See Also

Understanding Reconciliation Exceptions

Resolving Exceptions Using Semi-manual Reconciliation

Access the Semi Manual Reconciliation page.

If the Bank Reconciliation process could not reconcile a transaction, you can try to manually match transactions from the bank side to transactions on the system side, as long as the amounts match.

You can only reconcile transactions by matching one bank transaction to one system transaction (one to one) or one bank transaction to many system transactions (one to many). Select the transactions on each side that you want to reconcile, and click Reconcile.

See Also

Reconciling Transactions Semi-manually

Viewing Accounting for Forced Reconciliations

Access the Bank Statement Processing Accounting (BSP) page.

To view all journal entries for force reconciled transactions, run the Automated Accounting (TR_ACCTG) process prior to accessing this page.

See Also

Reviewing Accounting Information