Creation of a Reference Account for Balancing 

Purpose

When you balance accounts, you can either post the result on the account itself or on another account (the reference account).

You can define the root account of an interest compensation hierarchy as a balancing reference account. A reference account cannot, in turn, refer to another account.

To prevent a debit account balance for accounts with the Amount Notices feature, you can also post the result of the balancing run on a special CpD (suspense) account. You specify the special suspense account in Customizing for Bank Customer Accounts (BCA) by choosing Account Management ® Maintain CpD-Accounts for Special Purposes.

It is also possible to balance an account that has an external reference account (that is managed by an external bank). In this case, the system creates a payment order. The interest and charges are posted on the account referring to the reference account (referencing account) as usual (one payment item position per condition category). The offsetting item is posted as one total.

Prerequisites

If you have created an entry in Customizing for the account bank area for which you are creating the reference account for the account balancing, you can select the account identification for an external reference account. You make this entry in Customizing for BCA by choosing Account Management ® Basic Functions in Account Management ® Set up Recipient Account Identification.

Process Flow

Creating a reference account

...

       1.      Choose Account ® Change.

The system displays the initial screen for the display of an account.

       2.      Enter the bank area, account number, and, if required, the business partner data.

       3.      Choose Continue.

The account maintenance screen appears.

       4.      Choose the Account Balancing tab page.

       5.      In the Account Balancing group box, choose a reference account type (whether internal or external).

       6.      Choose  with the quick info text Create Reference Account.

       7.      Enter the required data and choose Continue.

If a reference account already exists, you need to delete it first by choosing  with the quick info text Delete Reference Account.

Displaying a reference account

The Balancing group box has the following buttons that that enable you to specify the type of reference account:

·        No Reference Account

This indicator shows that the balancing result is not posted to a reference account.

·        Internal Reference Account (Direct)

This indicator shows that the balancing result is posted directly to a reference account. In this case, the account referring to another account (referencing account) and the reference account are both in the same bank area. The interest and charges are posted directly to the reference account. No posting is made to the referencing account itself, but the interest and charges are displayed in the referencing account overview for the balanced periods. The general ledger is updated in accordance with the general ledger account assignment of the referencing account.

·        Internal Reference Account (Indirect)

This indicator shows that the balancing result is posted to the referencing account and then transferred to the reference account. In this case, a payment order is created automatically, and can be a bank transfer or a debit.

·        External Reference Account

This indicator shows that the balancing result is posted to the referencing account and then transferred to the reference account. In this case, a payment order is created automatically, and can be a bank transfer or a debit. An external reference account is a reference account that is in a different bank area from the account referring to it.

When you specify an internal or an external reference account, the bank area and account number (for internal accounts), or the bank country, bank key, and account number (for external accounts) are also displayed.

Result

The reference account is  created. You can now use the reference account for account balancing.

 Error Processing:

Internal reference account (direct)	If an error occurs on the referencing account, nothing is balanced. You must correct the error and then restart the account balancing run. If the error occurs with the reference account, the balancing item (interest and charges) is placed in postprocessing. The referencing account is still completely balanced.
Internal reference account (indirect)	If an error occurs on the referencing account, nothing is balanced. You must correct the error and then restart the account balancing run. If the error occurs on the recipient side of the payment order (for example, the transaction type is locked), the ordering party side is posted and the recipient side is placed in postprocessing. If the error occurs on the ordering party side, the system does not balance the account interval that contains the incorrect account. If the error cannot be corrected immediately, it is advisable to lock the referencing account before the restart, to allow the rest of the account interval to be balanced.
External reference account	See the description for the internal reference account (indirect)