AP/AR Netting

AP/AR Netting automatically compares Payables to Receivables and creates the appropriate transaction in each system to net supplier invoices and customer invoices. With this functionality, A receivables user can

View netted receipt details directly from the receipt Create Netting Agreements and Netting Batches

With this functionality, there is significant increase in user productivity and effectiveness because of tight integration and automation.

You can access the process via:

Navigation: Receipts > Netting > Netting Batch Navigation: Receipts > Netting > Netting Agreement

Receipts > Receipts > Action Menu: AP/AR NettingAfter Querying a netted receipt, the user can see more details about the batch by selecting AP/AR Netting from the Action menu. This launches the AP/AR Netting batch window. Netted Receipts are created automatically by the AP/AR Netting process and cannot be updated by the user from the Receipts Workbench

As we have seen Contra charging has been replaced by AP/AR Netting, lets take a setup walk though to use this functionality.

1.Define netting control account

Setup>Financials>Flex field>key>values

The account should be Asset account

2.Create bank

Setup>payment>Bank and Bank Branches

Set the Netting account to Yes

You should note, Payment document is not required for netting bank account.

3.Go to receivables responsibility, receipt class definition form

Setup>Receipts>Receipt class

Query the 'AP/AR Netting' receipt class, which is a seeded one.

4. Attach your bank account in this receipt class.

5.Go to system options, transaction and customer tabbed region, there enable 'Allow payment of Unrelated Transactions'check box

Set the Profile Option Profile Option: Chargeable Subcontracting Enabled.

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

“No”- Only invoices that were matched to purchase orders without outsourced assemblies would be selected by the netting process.

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

Then Create the Document Sequence

SysadminApplicationDocument—Sequence Numbering

Create netting agreement

Receipts>Netting>Netting Agreement

Entering the Net Batch

7. Enter an Invoice in Payables, validate and run create accounting.

8. Enter a transaction in receivables.

9. Create Netting Batch

Receipts >Netting >Netting Batch

10. Query your netting batch and see the status as Complete. also click on view report icon on right side.click on run push button, you can see the final netting report.

11.Go to view>request>find

You can see 3 concurrent request programs

Create Netting batch Settle netting batch

Netting Data Extract

12.Now go to receipts and query the AP/AR netting receipt.

13.Now Go to Tools >view Accounting, you can see Netting control account (defined in first step a) debited and receivable account credited.

14. Now go to payables and query your invoice number and click the tab view payments. You can see the payment details and copy the document number.

15.Query your copied payment document number.What you can see the payment type as Netting .

16.Click actions button and enable the check box create accounting.

17.Go to tools>view accounting .You can see the accounting entry

1. AP/AR Netting 2. Netting When a trading partner is both a customer and a supplier, you may choose to offset open

receivables’ against open payables’ items. Netting Agreements add trading partner terms as well as deploying company controls. A selection program automatically pulls information from Oracle Receivables and Oracle Payables taking into consideration discounts, late fees, and withholding taxes prior to determining the final netting amount. A review process and trading partner approval afford further verification to support the netting event.

3. Per-Requisites Setups Required for AP/AR Netting - Define netting control account Receivables System Options Create bank- “Netting Account” flag to Yes Receipt class -‘AP/AR Netting’ Attach your bank account in this receipt class Netting Batch Approver Profile: Chargeable Subcontracting Enabled Document sequencing for AP & AR Netting Agreement

4. Receivables System Options- Enable check box “Allow Payment of Unrelated Transactions”

5. Netting Bank Account

6. Receipt Class – Creation Method AP/AR Netting

7. Attach Bank Account to Receipt Class

8. Profile Option: Chargeable Subcontracting Enabled “Yes”- Only invoices that were matched to purchase orders with outsourced assemblies would be selected by the netting process. “No”- Only invoices that were matched to purchase orders without outsourced assemblies would be selected by the netting process. “D”- All eligible invoices will be selected for netting irrespective of whether or not they are matched to purchase orders.

9. Document Sequencing Category Receivables- AP/AR Netting Payables- Netting payments

10. Netting Agreement Payables -> Payment -> Netting Receivables -> Receipt -> Netting

11. Entering Netting Batch

12. Request Create Netting Batch Settle Netting Batch Netting Data Extract

13. Query Receipt

14. Query Payments Note- No Payment Document is to be Attached

Oracle Financials Common Country Features user guide