Reclassify AP/AR Process
This refers to the process of reclassifying accounts payables and receivables to the correct reconciliation account, which is typically a period-end activity.
Common Business Requirement
At the end of each month, if there are customer reconciliation accounts which are in credit balance, they should be reclassified to current liabilities accounts. If there are vendor reconciliation accounts which are in debit balance, they should be reclassified to current assets accounts. Reclassification should be carried out after GR/IR account maintenance has been completed. After AP/AR reclassification has been completed, foreign currency revaluation should then be carried. For more details, refer to process on Foreign Exchange Revaluation.
Regrouping according to long-term asset and liabilities remaining will not be done since there is no business requirement.
Common Business Process FlowCommon Business Process Flow for Reclassify AP/AR is as follow:
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Standard SAP function will be used. When customer reconciliation account is a credit balance, the credit balance is transferred with adjustment account to a current liability account on the balance sheet. If the vendor reconciliation account is a debit balance, it will be transferred to a current asset account on the balance sheet.
This standard SAP program will also be used if
• There is a need to reclassify the open customer/vendor items based on the remaining term
• There is a need to change the reconciliation account of customer/vendor.
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