Matching and clearing transactions for business partners or for G/L accounts is part of the bookkeeping process. The internal reconciliation function in SAP Business One lets you match and clear transactions that remain open for a business partner in the application. You can perform either a partial or full reconciliation for a specific business partner or for multiple business partners.

Most of the time, internal reconciliations take place automatically when you create incoming or outgoing payments linked to invoices. In this case, SAP Business One automatically reconciles payments with the linked invoices. Stand-alone transactions, such as payment on account, remain open since SAP Business One cannot automatically match such a payment to an open invoice.

You make the decision about which invoice the payment should be applied to. With regard to reconciling G/L accounts, during some business processes, related debit and credit transactions are posted to the same G/L account. The business process is complete only when the account has matching debit and credit postings.

You do not need to perform an internal reconciliation for every account that has debit and credit postings. You can use the internal reconciliation function as an internal control tool to identify incomplete, incorrect, or missing postings in
your internal G/L accounts and in your business processes. For example, you would usually reconcile bank clearing, deferred tax, and allocation accounts.