Create Netting Transactions

Configure the Netting Transaction Event
business process and security policy in the Supplier Accounts and Customer Accounts functional areas.

Create Invoice Eligibility Rules for netting transactions.

Configure Netting Rules.

Configure these domain security policies on 1 or both functional areas according to your business needs:

Security: Process: Netting Transaction
domain in the Supplier Accounts and Customer Accounts functional areas.

Security: Set Up: Netting Rules
domain in the Common Financial Management functional area.

You can use netting transactions to net the amount payable and amount receivable on these documents:

Customer invoice

Customer invoice adjustment

Supplier invoice

Supplier invoice adjustment

Invoices and adjustments are eligible to net based on the netting rules and invoice eligibility rules configured. Both rules apply to customers and suppliers on a company or company hierarchy. We display invoices:

With negative and positive balances.

Based on the days you configure on the

# of Days Invoices are Open Before Netting

field on the invoice eligibility rule. From the field, we populate and lock down the

Invoice Date On or Before

field on the transaction.

We don't display invoices:

With a balance of zero.

From suppliers marked for 1099 MISC reporting.

Access the

Create Netting Transaction

task.

Select the

Currency

. We populate the field from the

Company

, but you can change it to view and net invoices in a different currency.

We support multicurrency on netting transactions, where the currency on the invoices is different from the ledger currency. For a valid netting transaction, both supplier invoices and customer invoices selected must be on the same currency.

Select the

Netting Rule

that you want to apply to the transaction.

Enter a

Transaction Date

Enter a date on or after the invoice date.

(Optional) For tenants with

Balancing Worktag

configured:

Select the

Balancing Worktag

on the netting rule to calculate interworktag balancing entries when you net customer and supplier invoices that have different balancing worktags.

Select the

Optional Balancing Worktag

on the netting rule to calculate interworktag balancing entries.

From the Supplier Invoices and Customer Invoices tabs, select the invoices or adjustments that you want to net. Consider that selecting an invoice doesn't guarantee netting.

You're able to net invoices based on:

The available total supplier invoice amount and customer invoice amount.

The invoice eligibility rules. The oldest invoice nets first, based on invoice date.

After you approve a netting transaction, we generate accounting that reverses the accounts payable and accounts receivable balances of the individual supplier invoices and customer invoices.

Settle any balance due left on the invoices after you netted.

Print a netting statement.

Send a netting statement along with the payment remittance information to the supplier.