Internal reconciliation is part of the posting process and involves matching and clearing transactions from business partners and G/L accounts. In SAP Business One, part of the internal reconciliation process is automatically performed by the application and another part can be performed manually.
Most of the time, internal reconciliation is done automatically, for example, when you create received or made payments linked to invoices. In this case, SAP Business One automatically reconciles the payments with the linked invoices. However, a stand-alone transaction, such as a payment on account, cannot be automatically reconciled because SAP Business One cannot know which open invoice the payment is related to. Therefore, you need to decide which invoice the payment should be applied to and perform the reconciliation manually.
For both automatic system reconciliations and manually performed reconciliations, SAP Business One allows you to view detailed reconciliation information, and if necessary, cancel previous reconciliations in some cases.