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    Vikash Sethi
    Who is using Clearing Account Reconciliation?
    Topic posted March 18, 2019 by Vikash SethiSilver Medal: 2,000+ Points, tagged General Ledger, Period Close / Reconciliation 
    620 Views, 6 Comments
    Title:
    Who is using Clearing Account Reconciliation?
    Summary:
    Who is using Clearing Account Reconciliation?
    Content:

    With R13, Clearing Account Reconciliation feature is provided by Oracle. Is there anyone who is using this feature? If yes, for what kind of accounts are you reconciling? Is it useful? Any issues?

    Also do we still need to get Account Reconciliation Cloud Service (ARCS or Blackline)? Is it a replacement for ARCS/Blackline products?

    I will appreciate any suggestion or guidance on this topic.

    Comment

     

    • Harold Lecomte

      Hi Vikash,

      I have used the Clearing Account Reconciliation feature as part of an implementation project, please see my key takeaways below:

      • In order to use account reconciliation for entries coming from subledger, you will need to define journal lines rules to populate the 'reconciliation reference' field. If the 'reconciliation reference' field is empty, the automatic reconciliation feature will not work.
      • The consequence of using journal line rules to populate the reconciliation reference is that the journal lines that come from Oracle Cloud subledger will be posted at detailed level, even if you have chosen to summarise accounting entries in your subledger accounting setup. This makes sense since you would need to reconcile items at transaction detail level but it is worth keeping in mind if you wish to maintain a thin ledger.
      • I have seen this account being used for accrual entries, with number of journal lines to be reconciled monthly fairly limited (under 1,000 lines). However using clearing account reconciliation for journals posted directly to GL is dependent on accountants populating accurately the reconciliation field otherwise the automatic reconciliation will not work.
      • We did some performance testing with up to 200,000 lines and were able to reconcile them automatically with the process taking less than 2 minutes so  volume seems to be handled fairly well.
      • My main concerns/issues with the feature as currently available are:
        • The automatic reconciliation does not work if the reconciliation reference is empty, even if you have only 2 lines available for reconciliation with corresponding debit and credit amount.
        • Once a rule is setup, it is not possible to update the accounts that it applies to. So every time you wish to add new accounts in the scope of the reconciliation feature, a new rule needs to be created.
        • Automatic reconciliation works solely based on amount and reconciliation reference, no other attributes can be used to reconcile the items. For example, it would be useful to have the possibility to add a date parameter in the reconciliation rule.
        • There is no amount tolerance on the feature for automatic reconciliation. Amount tolerance can only be used for manual reconciliation.
        • When manual reconciling items where total debit is not equal to total credit (within the amount tolerance), there is no functionality to write off that unbalancing amount. Therefore using the tolerance feature will result in having a balance stuck on the clearing account.

      In summary, I would say that this feature is fairly basic and can only be used in some scenarios. ARCS or other reconciliation solutions may be more appropriate for complex reconciliation such as:

      • Use multiple attributes to match debits and credits
      • Use amount tolerance as part of the automated reconciliation
      • Use advanced reconciliation rules where the reconciliation attributes may not be exactly the same (e.g. due to a typo)
      • Create an automatic write off for reconciling items that do not exactly balance

      I hope this helps and look forward to reading comments from other members who have used this feature!

      Thanks,

      Harold

      • Vikash Sethi

        Thanks very much for detailed explanation Harold. Waiting to see if other members have also used this feature.

        Vikash

    • David Murphy

      Hi Harold - a very good summary of this feature.

      We use it and I agree with your comments. 

      Pain Points for us include:

      Unable to update the "Reconciliation Reference" filed for historic data - means that we have to do manualrecs

      No facility to "Select All" transactions (where user would then uncheck those not to be included in the rec.

      As you say, a very basic/simple implementation feature - here's hoping that Oracle read your commenst and enhance th efeature in a future release.

      • Anant Iyer

        As per your above post

        Quote -

        Pain Points for us include:

        Unable to update the "Recronciliation Reference" filed for historic data - means that we have to do manualrecs

        No facility to "Select All" transactions (where user would then uncheck those not to be included in the rec. - Unquote

         

        Please refer to the online help 19C:  https://docs.oracle.com/en/cloud/saas/financials/19c/faugl/accounting-period-close.html#FAUGL2420075 for specific answers.

        Thanks - Anant Iyer

    • John Mulvihill

      One of our business offices started using Clearing Account Reconciliation but only wanted to start from July 2018 going forward.  We went live in the prior fiscal year so they have several outstanding July 2018 journal lines that relate to June 2018 activity.  Is the only way to get rid of these outstanding transactions to reconcile all the way back to our first period in Oracle Financials?

      • Harold Lecomte

        You should run the Enable Journal Lines for Clearing Accounts Reconciliation process to make past journal lines available for reconciliation.