Collective account (SAP B1)

An internal account that is used to manage related TransactionsThe aim is to collect data, such as sales or purchases, in order to provide a complete picture of the corresponding business activity.

On Collection account - also as reconciliation account is a balance sheet account in the general ledger that is automatically posted in SAP Business One as soon as a transaction is made with a business partner (customer or supplier).

Purpose and function

The collective account serves as Central control account for all postings to linked debtor or creditor accounts.
It ensures that Receipts such as invoices, Credits and payments correctly in the general ledger.
The balance of the collective account reflects the Total balances of all allocated business partners.
It is used in the Balance sheet report and is therefore relevant for financial reporting.

automation

Collection accounts are part of the automated booking system in SAP Business One.
Manual postings to collective accounts are not permitted.
the G/L account determination controls which account is used automatically. The setup takes place under Administration > Definitions > Financial accounting > G/L account determination.

Setup and configuration

The collective account is displayed in the business partner master record on the Accounting - General defined.
The assignment is made automatically when a business partner is created, but can be adjusted up to the first booking.
in the chart of accounts the account must be marked as reconciliation account (activate checkbox).
Only accounts in the category "Other" (balance sheet accounts) are permitted.

Integration in documents

When posting an outgoing invoice, the assigned debtor collective account is automatically included.
With incoming payments is cleared via the corresponding vendor account in the general ledger.
In documents, the corresponding reconciliation account is entered in the "Reconciliation account" displayed.

Extended use

Additional reconciliation accounts can be opened for deposits (e.g. prepayment liabilities or receivables).
These accounts are maintained separately and may not be labelled as collective accounts.
One example is the Interim account down paymentwhich is used for down payment bookings.

Significance for accounting

Collective accounts ensure Transparency, traceability and automation in financial accounting.
They form the link between operating transactions (e.g. invoice, payment) and the Financial reports.
Correct configuration is crucial for Proper accounting.