AP AR Netting

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AP/AR Netting Setup & Usage
Prasad Dudhihalli
Principal Software Engineer
AP/AR Netting Webcast Resource Links
To access the AP/AR Netting Setup & Usage webcast

recording:
https://oracleaw.webex.com/oracleaw/lsr.php?AT=pb&SP=EC&
rID=77262202&rKey=6b7496efbb1b15c2
To ask questions on the topic of AP/AR Netting Setup & Usage:

https://community.oracle.com/thread/3351729

Objectives
Following this session, you will understand:
How to implement AP/AR netting
Creation of netting agreements
How to create & schedule netting
batches
Criteria used to select invoices
for netting

Agenda
Netting Overview
Required Setups
Simple Netting Process
Creation of Agreement
Creation of Batch
Approval Mechanism In Netting
Chargeable Subcontracting
Troubleshooting Tips
Diagnostics

Netting Overview
The Payables and Receivables Netting feature:
Enables the automatic netting of Payable and Receivable transactions
Automatically creates the Payables Payments and Receivables

Receipts required to clear selected transactions

Netting Overview
In this scenario one of the AP invoices would be partially applied.
Customer AR Invoices
#AR-1 $100 Receipt $150
#AR-2 $50
Minimum of
AP or AR
Supplier AP Invoices
#AP-1 $100 Payment $150
#AP-2 $100

Agenda
Netting Overview
Required Setups
Creation of Batch
Diagnostics

Required Setups
General Ledger Setup Prerequisites
Define netting control account
Define exchange rate types (if using multi-currency netting)
Cash Management Setup Prerequisites

Define netting bank account
Define netting control account
Enable Multiple Currency Receipts check box for netting bank
account

Required Setups

Required Setups
Receivables Setup Prerequisites
Associate bank account used in netting agreement with AP/AR
Netting seeded Receipt Class
Set up a paying relationship for customers prior to netting multiple
customers
Enable Allow Payment of Unrelated Transactions Receivables System
Option, if required

Required Setups

Agenda
Netting Overview
Required Setups
Creation of Batch
Diagnostics

Netting Agreement
Netting agreements:
Control how trading partners net Payables & Receivables transactions
Include business rules that define
Types of transactions that may be selected for netting
Suppliers and customers which can be netted
Can be created for each group of trading partners that agrees to net
transactions

Netting Agreement
Navigation: Receipts > Netting > Netting Agreement

Netting Agreement

Netting Agreement

Netting Agreement

Netting Agreement

Netting Agreement

Netting Agreement

Netting Agreement

Agenda
Netting Overview
Required Setups
Creation of Batch
Diagnostics

Netting Batch Process
To select business rules & transactions to net, the netting batch

process uses
Predefined information from the netting agreement
Parameters passed while creating netting batch
Review selected transactions and edit as needed (optional)
Netting process reconciles and clears selected transactions for both
Payables and Receivables

Netting Batch
Navigation: Receipts > Netting > Netting Batch

Netting Batch
Event Batch Status

User creates the netting batch RUNNING
Error encountered while validating or selecting ERROR
transactions
Review Batch option is set to Yes SELECTED
Review Batch option is set to No and no CLEARING

approval is required
Netting process completed for transactions COMPLETE

Netting Batch

Netting Batch

Criteria For Selecting AR Transactions
AR Payment Schedule due date must be

Less than or equal to transaction due date in Netting Batch
Between Agreement start and end dates
Transaction selected restricted by

Customer and Customer Sites in the Agreement
Transaction Types in the Agreement

Transaction cannot be
Having prepayment
(RA_CUSTOMER_TRX.PREPAYMENT_FLAG = N)
In dispute
Credit Card payment method
(PAYMENT_TYPE_CODE not = CREDIT_CARD for associated
Receipt Method)
Included in a batch in Incomplete status

Transaction should be
Having Operating unit of the netting batch
Complete
Payment schedule status must be open

Criteria For Selecting AP Invoices
AP scheduled payment due date must be

Less than or equal to Transaction due date
Between Netting Agreement start and end dates
Invoice selection restricted by

Supplier and supplier sites (if specified) in the agreement
Invoice Types in the Agreement

Criteria For Selecting AP Invoices
Invoices cannot be
On Hold ( Payment schedule.hold_flag = N)
Included in a batch in Incomplete status
Invoices should be
Approved
Having Operating unit of the netting batch

Netting Batch

Final Netting Report

Netting Batch
Submit Netting Batch Process

Determines receipt and payment information
Settle Netting Batch

Finalized when AP Payment & AR Receipt created to offset balances due
to netting
Status changes from Clearing to Complete

Receipt In Receivables

Payment In Payables

Concurrent Programs

Agenda
Netting Overview
Required Setups
Creation of Batch
Diagnostics

Netting: Trading Partner Approval

Netting: Trading Partner Approval

Proposed Netting Report

Netting Batch
Event Batch Status
"Review Batch" option is set to "No" and SUBMITTED
approval is required
User approves batch requiring approval APPROVED
User rejects batch requiring approval REJECTED
Current date has gone past batch settlement SUSPENDED

date
User chooses to reverse batch REVERSING
Batch has been reversed REVERSED

Agenda
Netting Overview
Required Setups
Creation of Batch
Diagnostics

Enable the JMF: Enable Subcontracting profile option.

Identify your chargeable subcontracting receivables invoices with
your chargeable subcontracting-specific receivables transaction
type.
Create a chargeable subcontracting-specific netting agreement
for each manufacturing partner involved with outsourced
assemblies.


Select only the invoice lines that are matched to purchase order
lines with outsourced assembly items.
Select only the invoice lines that are matched to purchase order
lines with non-outsourced assembly items.
Select all the Payables invoices for netting, without regard to

outsourced assembly items.

Summary Of Netting Process Steps
1. Create a customer and invoice in Receivables
2. Create a supplier and invoice in Payables
3. Create a netting agreement
4. Create a netting batch
5. Review transactions selected in netting batch

Summary Of Netting Process Steps
6. Submit netting batch
7. Submit Trading Partner Approval process (if required)
8. Settle netting batch
9. Review receipt and payment details

Agenda
Netting Overview
Required Setups
Creation of Batch
Diagnostics

Troubleshooting

Diagnostics
Data Required for Support:
Log file/screenshot showing issue
Debug log file (Doc ID 433199.1)
Diagnostics of netting batch (Doc ID 732129.1)
FUN_NET_AGREEMENTS_ALL
FUN_NET_CUSTOMERS_ALL
FUN_NET_SUPPLIERS_ALL
FUN_NET_AP_INV_TYPES_ALL
FUN_NET_AR_TRX_TYPES_ALL
FUN_NET_BATCHES_ALL

Top Articles & Community Links
Possibility Of Scheduling AP/AR Netting Batch (Doc ID 1336994.1)
FAQ : AP/AR Netting Common Questions and Problems (Doc ID 1067767.1)
AP/AR NETTING A TECHNICAL
INSIGHT (Doc ID 731191.1)
AP/AR Netting: Setup and Usage (Doc ID
1399565.1)
Invoice Open After Netting Batch
Complete. Zero Partial Amount Applied or
AP/AR Netting Report Shows Part of
Receipt Amount is Unapplied (Doc ID
1520113.1)

Top Articles & Community Links
Continue the discussion! For follow up questions on topics covered in
this webcast, connect via this Receivables Community thread:
https://communities.oracle.com/portal/server.pt/community/view_discussi
on_topic/216?threadid=726067
Receivables Community:
https://communities.oracle.com/portal/server.pt/community/receivables/2
33
Payables Community:
https://communities.oracle.com/portal/server.pt/community/payables/284

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Questions & Answers
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https://communities.oracle.com/portal/se
rver.pt/community/view_discussion_topic
/216?threadid=726067

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1 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

Safe Harbor Statement

2 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

To access the AP/AR Netting Setup & Usage webcast

To ask questions on the topic of AP/AR Netting Setup & Usage:

4 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

5 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

6 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

The Payables and Receivables Netting feature:

Enables the automatic netting of Payable and Receivable transactions

Automatically creates the Payables Payments and Receivables

7 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

8 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

9 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

Cash Management Setup Prerequisites

10 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

11 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

12 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

13 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

14 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

15 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

16 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

17 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

18 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

19 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

20 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

21 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

22 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

23 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

24 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

To select business rules & transactions to net, the netting batch

25 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

26 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

Event Batch Status

Review Batch option is set to Yes SELECTED

Review Batch option is set to No and no CLEARING

27 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

28 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

29 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

AR Payment Schedule due date must be

Transaction selected restricted by

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31 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

32 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

AP scheduled payment due date must be

Invoice selection restricted by

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34 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

35 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

36 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

Submit Netting Batch Process

Settle Netting Batch

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44 Copyright 2013, Oracle and/or its affiliates. All rights reserved.

User rejects batch requiring approval REJECTED

Current date has gone past batch settlement SUSPENDED

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46 Copyright 2013, Oracle and/or its affiliates. All rights reserved.