Intercompany Matching and Reconciliation (ICMR)

Intercompany Matching and Reconciliation (ICMR) is an out-of-box solution that is built-in SAP S/4HANA

Intercompany reconciliation is a process of reconciling intercompany financial accounts between two or more companies. It is the process of transferring assets, liabilities, or equity accounts between companies to ensure the consistency of financial statements. This process is usually initiated by the management of the larger company or companies, with the smaller company or companies being the target of the reconciliation.

One of the main issues of intercompany reconciliation is to determine the transfer of assets and liabilities between the two companies. The transfer of equity accounts is a bit different and is usually initiated by the accounting firm of the larger company.

What is Intercompnay Matching and Reconciliation (ICMR)?

ICMR is a next generation intercompany reconciliation solution available starting from SAP S/4HANA On-premise 1909 and SAP S/4HANA Cloud 1908. Your financial data is processed and reconciled in real time by the ICMR solution, which matches transactions without using any ETL (extract, transform, load) steps.

ICMR increases the process’s visibility and transparency, by eliminating the delays that are frequently encountered while addressing intercompany differences.

All this is possible with the Universal Journal table(ACDOCA) and simplifying the financial tables in SAP S/4HANA.

7 key features of ICMR

ICMR comes with following key features

1. Built into SAP S/4HANA(core)
2. Real-time reconciliation and matching at the transactional level
3. Automatic resolution of discrepancies
4. Amazing matching and reconciliation performance
5. Modeling can be performed based on variety of organizational dimensions, such as company, profit center, and consolidation unit.
6. Provides ability to read data directly from the remote systems
7. It also provide a flexible matching and reconciliation rule definitions and workflow-based in-app communication.

ICMR Process Overview

SAP S/4HANA Intercompany Matching and Reconciliation (ICMR) is a 4 step process

1. Collect Data
2. Match Documents
3. Solve Discrepancy
4. Check Reconciliation Balances

ICMR Architecture

ICMR is an out-of-box solution available in SAP S/4HANA(core) without any additional license. The overall architecture contains three modules: Matching, Reconciliation, and Automatic Posting that you can find from the diagram below.

Reconciliation provides an aggregation-level perspective, while Matching focuses on matching at the transactional level. Together, the two modules are capable of processing, analyzing, and presenting two sets of data at both the aggregate and line item levels. For variance correction, accrual postings, or elimination postings, the final module Auto Posting offers an additional function.

ICMR Fiori Apps

SAP S/4HANA ICMR have set of apps to maintain datasources, define matching methods, automatic adjustment automatic logs etc.. The PFCG role SAP_BR_RECON_ACCOUNTANT (General Ledger Accountant – Intercompany) contains all ICMR related SAP Fiori apps. Below you can find the list of ICMR SAP Fiori apps in SAP S/4HANA.

1. Maintain Data Source

Each data source is given one or more CDS views as well as some business semantics, such as the fields that are utilised as the leading unit and partner unit, respectively.

For entity pairs like company and trade partner company, profit centre and partner profit centre, SAP provides the data sources for comparing journal entry data from the Universal Journal Entry Line Items database ACDOCA. Pre-delivered data sources have names that begin with “S”.

You can add your custom fields by extending the ICA_S_DIM and ICA_S_DIM_P structures in the back-end system and extend the standard CDS view by creating Extended CDS view using SAP ABAP Development Tools(ADT).

PFCG Role	SAP_BR_RECON_ACCOUNTANT
Business Catalog	SAP_FIN_BC_ICA_ME_CONFIG (Intercompany Matching Settings)
SAP Fiori App	Maintain Data Source(ICADS)

2. Define Matching Method

As per SAP definition:

A matching method is a collection of matching rules and is used to match items from two data sets.

The filters for data selection in document matching and reconciliation can be defined in the Define Matching Method Fiori app. With the Define Matching Methods app, you can create, display, change, or delete matching methods.

PFCG Role	SAP_BR_RECON_ACCOUNTANT
Business Catalog	SAP_FIN_BC_ICA_ME_CONFIG (Intercompany Matching Settings)
SAP Fiori App	Define Matching Methods (F3862)

Configuration-type matching methods can be transported between systems only with a transport request by using transaction code ICATRM (Transport Matching Methods).

2.1. Define Additional Setting for Matching Methods (Optional)

You can create additional configuration settings for the appropriate matching methods. The following settings are available:

– Enable synchronization of clearing status

– Enable synchronization of reversal status

– Enable machine learning

3. Define Reconciliation Cases

You can create, display, modify, or delete reconciliation cases using the Define Reconciliation Cases app. On the list page, you may see a list of all your reconciliation cases.

You can check or modify any of a reconciliation case’s aforementioned characteristics and settings by going to the detail screen. Select Save to save your changes after you’ve made any. Any reconciliation cases that are no longer required can also be deleted.

PFCG Role	SAP_BR_RECON_ACCOUNTANT
Business Catalog	SAP_FIN_BC_ICA_RECON_CFG (Intercompany Reconciliation Settings)
SAP Fiori App	Define Reconciliation Cases (F3863)

4. Maintain Reason Codes

The reason code explains why some items are matched or if there are any post-processing tasks that need to be done. There are a number of reason codes that begin with “S” and are pre-delivered in SAP; you cannot modify or remove these codes. You have the option of starting from scratch or replicating an existing reason code.

PFCG Role	SAP_BR_RECON_ACCOUNTANT
Business Catalog	SAP_FIN_BC_ICA_ME_CONFIG (Intercompany Matching Settings)
SAP Fiori App	Maintain Reason Codes

5. Define G/L Posting Document Template

You can define G/L posting document templates for various adjustment. To settle discrepancies between seller’s Account Receivables and buyer’s Account Payables, G/L posting document templates are used. There are a number of document templates that begin with “S” and are pre-delivered in SAP; you cannot modify or remove those templates.

6. Assign Document Templates to Companies

You can assign General Ledger (G/L) posting document templates to companies. You assign the defined document templates to combinatiions of company, trading partner, and reason code.

7. Manage Workflows – Intercompany Variance Adjustment

When a user processes a matched assignment with a reason code that has an adjustment class, the variance adjustment process is kicked off in the Manage Assignments app. Add a workflow scenario to your reason code if you want the auto-adjustment to be reviewed and authorised beforehand.

For the approval of variance adjustments, WS78500087, a pre-defined workflow scenario, is provided. Using the Manage Workflows – Intercompany Variance Adjustment app, you can define your workflows for the auto-adjustment process based on this specific scenario.

8. Manage Teams and Resposibilities

To decide which agents are accountable for which intercompany workflows, you may use the Manage Teams and Responsibilities – Intercompany app to define teams and team member functions. You can set up teams and give them tasks for the following two ICMR processes – Variance Adjustment and Reconciliation Close

You can use this app to:

• Create, edit, copy, and delete teams
• Assign team members functions
• Show Hierarchy lets you set up and manage a hierarchy for teams, sub-teams, and super-teams.

PFCG Role	SAP_BR_RECON_ACCOUNTANT
Business Catalog	SAP_FIN_BC_ICA_ME_CONFIG (Intercompany Matching Settings)
SAP Fiori App	Manage Teams and Responsibilities(F2412)

9. Activate Reconciliation Close Process

For the following procedures, you can configure and activate the reconciliation closure process:

• Management of the state of the reconciliation process at its close
• Postings about elimination and the elimination method

PFCG Role	SAP_BR_RECON_ACCOUNTANT
Technical Catalog	SAP_TC_FIN_ICA_BE_APPS (Intercompany Reconciliation: Classic Apps)
SAP Fiori App	Activate Reconciliation Close Process

Important ICMR Transaction Codes

TCodes	Description
ICAIMG	IC Matching and Reconciliation
ICAADT	Assign Doc. Templates to Companies
ICAAM	Unlock Asynchronous Matching Status
ICAAS	Define Additional Method Settings
ICACF	Define Comparison Operators
ICACM	Maintain Communication Methods
ICADS	Maintain Data Sources
ICADT	G/L Posting Doc. Templates for Var.
ICAEA	Assign Email Templates
ICAFC	Define Custom Filters
ICAFS	Define SAP Standard Filters
ICAFU	Flexible Upload of Matching Items
ICAMLI	Intercompany Matching ML Inference
ICAMLM	Intercompany Matching ML Monitor
ICAMLT	Intercompany Matching ML Training
ICAN1	Define Number Range for Matching Doc
ICAN2	Define Number Range for Assignments
ICARC	Maintain Reason Codes
ICARM	Run Matching
ICASDS	Switch Data Source of Matching Meth.
ICASF	Define SQL Functions for Matching
ICATRM	Transport Matching Methods
ICAARC	Activate Recon. Close Process
ICAEM	Define Elimination Methods
ICATRC	Transport Reconciliation Cases
ICA_ELIM_SIM	Simulate Elimination

Intelligent ICMR

Intercompany matching and reconciliation (ICMR) is complemented by intelligent intercompany reconciliation, a technology that employs machine learning (ML) to better match intercompany transactions.

Summary

Your intercompany reconciliation process, from local financial close to group financial close, is accelerated with ICMR. You can perform a near-real-time matching and reconciliation process on continuosly changing data without using any ETL (Extract, Transform, Load) processes.

It enables business users to maintain a continuous accounting process and high levels of automation. With its integrated communication tools, including as workflows, notes, email notifications, and reminders, it eliminates the delays associated with a traditional reconciliation process while introducing responsibility, transparency, and visibility.

References

• Intercompany Matching and Reconciliation (ICMR) Configuration Guides
• SAP Press E-Bite – Introducing ICMR with SAP S/4HANA