FI / FICOadvanced

FICO Period-End Closing Part 5: Accruals, Reclassifications and Intercompany Reconciliation

Key takeaway

Handle judgment-heavy close tasks: accruals and deferrals with automatic reversal, recurring and accrual management, reclassifications for reporting (regrouping receivables/payables, reclass journals), and intercompany reconciliation and matching before group reporting.

Explanation

📌 KEY POINTS
✅ Accruals record expenses/revenues in the right period; they are reversed at the start of the next period.
✅ Recurring accruals can be automated (recurring entries or accrual management).
✅ Reclassifications present balances correctly (e.g. debit balances on payables regrouped, maturity splits).
✅ Intercompany balances must match between partners before consolidation.
⚠️ Accruals without reversal dates remain forever and double count when the invoice arrives.

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▶ WHERE WE ARE
Part 4 covered strategy. Now judgment tasks.

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▶ 1. ACCRUALS AND DEFERRALS

Manual with reversal date; automated accruals.

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▶ 2. REVERSAL

Mass reversal (F.81) or automatic by reversal date.

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▶ 3. RECLASSIFICATION

FAGLF101 regrouping; reclass journals with documentation.

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▶ 4. INTERCOMPANY

Matching by partner company, reference, amount; resolve differences.

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▶ 5. EVIDENCE

Support for estimates; approvals.

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▶ STEP BY STEP

Post an accrual with reversal date.
Run regrouping.
Match intercompany balances with a partner company code.

✅ CHECKPOINT: intercompany differences explained or cleared before day 3.

Code example

ABAP Code

===== ACCRUAL =====30.09: Dr Consulting expense 10,000 | Cr Accrued liabilities 10,000 (reversal date 01.10)01.10: reversal → invoice posted normally in October ===== TOOLS =====F.81 mass reversal | recurring entries F.14 | FAGLF101 regrouping | intercompany matching/reconciliation apps

Real project scenario

A group close regularly slipped because one intercompany partner booked charges a month late. Cut-off rules, trading partner discipline and a day-2 matching deadline removed the delay.

Common mistakes

Missing reversal dates.
Undocumented estimates.
No trading partner.
Late intercompany matching.
Reclass without support.

Best practices

Always set reversal dates.
Document estimates.
Trading partner mandatory.
Early matching.
Support reclasses.

Interview angle

Questions: "How are accruals handled?", "What is regrouping?", "How do you reconcile intercompany?"
Strong answer: accruals with reversal, automation, reclassification, intercompany matching, evidence.

Practice this lesson

Quick check

1. Accrued expenses are counted twice when invoices arrive. What was missing?

2. A group close slips because intercompany balances don't match. What helps?

3. Which field is essential for automatic intercompany matching?

Interview questions

1. Accruals are inconsistent across entities and intercompany differences delay consolidation. How do you fix these close tasks?

Answer it in your own words first, then compare.

2. Suppose you inherit an existing Period-End Closing solution. How would you review it before making a change?