What is letter of reconciliation in SAP FI-LC - Consolidation?

SAP Term: letter of reconciliation

• Component: FI-LC

• Component Name: Consolidation

• Description: A letter that passes between two trading partners to reconcile any differences between their respective balances with each other that is, payables and receivables, revenue and expense.

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• Key Concepts: 
  Letter of Reconciliation (LOR) is a document used in SAP FI-LC Consolidation to reconcile the differences between the actual and expected results of a consolidation process. It is used to identify and document any discrepancies between the two sets of data, and to provide an explanation for the differences. 
  
  How to use it: 
  The LOR is created in SAP FI-LC Consolidation by selecting the “Create Letter of Reconciliation” option from the menu. This will open a window where you can enter the details of the differences between the actual and expected results. Once all the details have been entered, you can save the LOR and it will be available for review. 
  
  Tips & Tricks: 
  When creating a LOR, it is important to ensure that all relevant information is included. This includes details such as the date of the consolidation, the type of consolidation, and any other relevant information that may help explain the differences between the actual and expected results. 
  
  Related Information: 
  The LOR is an important part of SAP FI-LC Consolidation, as it helps to ensure that all discrepancies are identified and documented. It is also important to note that any changes made to the LOR must be approved by an authorized user before they can be implemented.