AP/AR Netting Process

AP/AR Netting Process

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

1) Define netting control a/c

N>Setup>financials>flexfield>key>values

2) Create bank

N>Cash Management>Set up>Bank and Bank Branches

Note : Payment document is not required for netting bank account.

Netting Account should be ‘Yes’

 3) Receipt class definition in Receivables

Setup>Receipts>Receipt class

Query the ‘AP/AR Netting’ receipt class which is a seeded one.

4) Attach Netting 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.

N>Receivables>Set up>System options

6) Document Sequences : Document sequencing should exist for Netting payments and
AP/AR Netting Categories
 7) Create netting agreement

N>Receipts>Netting>Netting Agreement

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

9) Enter a transaction in receivables.

10) Create Netting Batch

Receipts >Netting >Netting Batch

11) 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.
12) Go to view>request>find

3 concurrent request programs will run

 Create Netting batch

 Settle netting batch

 Netting Data Extract

13) Go to receipts and query the AP/AR netting receipt.
14) Go to Tools >view Accounting, you can see Netting control account (defined in first
step a) debited and receivable account credited.
15) 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.

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

17) Click actions button and enable the check box create accounting.

18) Go to tools -> View accounting and check the accounting entry.