When you post items to a subsidiary ledger, the system automatically posts the same data to the general ledger (see the following illustration). Each subsidiary ledger has one or more reconciliation accounts in the general ledger. These reconciliation accounts ensure that the balance of G/L accounts is always zero. This means that you can draw up balance sheets at any time without having to transfer totals from the subledgers to the general ledger.

You have to specify a reconciliation account in every vendor master record. Settings made in a reconciliation account also affect the vendor accounts:

• You can use the reconciliation account to configure the screens for posting items to vendor accounts. Using the reconciliation account you could, for example, hide the fields for exchange rate hedges if these types of transaction are not made. For more information, see the documentation on Document Posting.

• You can also use the reconciliation account to specify which currencies you can use in posting to the corresponding vendor accounts.