AP/AR NettingAP/AR Netting

NettingNetting

When a trading partner is both a customer and a When a trading partner is both a customer and a supplier, you may choose to offset open receivables’ supplier, you may choose to offset open receivables’ against open payables’ items.against open payables’ items.

Netting Agreements add trading partner terms as well as Netting Agreements add trading partner terms as well as deploying company controls. deploying company controls.

A selection program automatically pulls information from A selection program automatically pulls information from Oracle Receivables and Oracle Payables taking into Oracle Receivables and Oracle Payables taking into consideration discounts, late fees, and withholding taxes consideration discounts, late fees, and withholding taxes prior to determining the final netting amount.prior to determining the final netting amount.

A review process and trading partner approval afford A review process and trading partner approval afford further verification to support the netting event. further verification to support the netting event.

Per-Requisites Per-Requisites

Setups Required for AP/AR NettingSetups Required for AP/AR Netting - -Define netting control account Define netting control account

Receivables System Options Receivables System Options

Create bank- “Netting Account” flag to YesCreate bank- “Netting Account” flag to Yes

Receipt class -‘AP/AR Netting’ Receipt class -‘AP/AR Netting’

Attach your bank account in this receipt classAttach your bank account in this receipt class

Netting Batch Approver Netting Batch Approver

Profile: Chargeable Subcontracting Enabled Profile: Chargeable Subcontracting Enabled

Document sequencing for AP & AR Document sequencing for AP & AR

Netting Agreement Netting Agreement

Receivables System Options-Receivables System Options-Enable check box “Allow Payment of Unrelated Enable check box “Allow Payment of Unrelated

Transactions” Transactions”

Netting Bank AccountNetting Bank Account

Receipt Class –Receipt Class –Creation Method AP/AR NettingCreation Method AP/AR Netting

Attach Bank Account to Receipt ClassAttach Bank Account to Receipt Class

Profile Option: Chargeable Subcontracting Enabled Profile Option: Chargeable Subcontracting Enabled

““Yes”- Only invoices that were matched to purchase Yes”- Only invoices that were matched to purchase orders orders withwith outsourced assemblies would be selected by outsourced assemblies would be selected by the netting process. the netting process.

““No”- Only invoices that were matched to purchase No”- Only invoices that were matched to purchase orders orders withoutwithout outsourced assemblies would be outsourced assemblies would be selected by the netting process. selected by the netting process.

““D”- All eligible invoices will be selected for netting D”- All eligible invoices will be selected for netting irrespective of whether or not they are matched to irrespective of whether or not they are matched to purchase orders. purchase orders.

Document SequencingDocument SequencingCategoryCategoryReceivables- AP/AR NettingReceivables- AP/AR NettingPayables- Netting paymentsPayables- Netting payments

Netting AgreementNetting AgreementPayables -> Payment -> NettingPayables -> Payment -> Netting

Receivables -> Receipt -> NettingReceivables -> Receipt -> Netting

Entering Netting BatchEntering Netting Batch

RequestRequest

Create Netting BatchCreate Netting Batch

Settle Netting BatchSettle Netting Batch

Netting Data ExtractNetting Data Extract

Query ReceiptQuery Receipt

Query PaymentsQuery Payments

Note- No Payment Document is to be Attached Note- No Payment Document is to be Attached