This chapter provides an overview of bilateral netting, discusses the prerequisite tasks, and discusses how to:
Set up bilateral nets.
Select nets automatically.
Create nets manually.
Adjust manually netted information.
Administer nets.
Process multicurrency nets.
Close nets.
Inquire on netting information.
Bilateral netting is a process by which two parties (vendor and client to each other) reduce or aggregate the overall number of transactions between them. This decreases actual transaction volume between the two parties. It also decreases the amount of accounting activity and associated business costs (for example, banking fees).
This chapter discusses how to configure, define, and process netting transactions. You can:
Select the vendors and customers involved in a netting relationship.
Define the rules, contracts, sequence order, and settlement method of a net.
Generate inquiries and reports on your netting data.
There are two netting closing methods: partial and full.
In partial netting, all items are netted to zero (0), and no payment or receipt of funds is done. You must run Pay Cycle Manager to make any adjustments or changes to the vouchers. Any voucher or item balance that is remaining is handled separately in Payables or Receivables.
Only the matching balance is paid off during partial netting, leaving some receivables items or payables items open. For example, if the total amount of all payables items participating in a netting cycle is more than the total amount of all receivables items, all receivables items are paid (or closed). The total amount applied to the receivables items is then used to pay individual payables items until this amount reaches zero. Likewise, if the total amount of all receivables items participating in a netting cycle is higher than the total amount of all payables items, all the payables items are paid. The total amount applied to the payables items is then used to pay individual receivables items until this amount reaches zero.
With full netting, you pay or receive all voucher items that are due.
During full netting processing, all receivables and payables items participating in the netting cycle are paid, and a new item is created for the remaining balance. This means that if the total amount of all payables items participating in any one netting cycle is more than the total amount of all participating receivables items, the system automatically creates a new receivables item (an invoice). If the total amount of all receivables items is more than the total amount of all payables items, the system creates a new payables item (a voucher).
Note. PeopleSoft delivers and supports only partial bilateral netting functionality. However, you can adapt the application to handle full bilateral netting functionality (though PeopleSoft will not support this configuration). In addition, when using full bilateral netting functionality, you can also optionally activate the value added tax (VAT) functionality to calculate VAT transactions.
Here is an example of partial bilateral netting:
Company A is both a client and a vendor of Company B and holds Accounts Payable (AP) and Accounts Receivable (AR) line items in relation to Company B. The two companies set up a contractual netting relationship, modifying their typical accounting, to enter into this protocol. They agree on particular intervals to conduct netting and zero out their respective accounts.
Company A's books contain the following line-item amounts:
AP |
AR |
100 |
150 |
250 |
50 |
Total: 350 |
Total: 200 |
<200> |
|
Net: 150 |
Without netting, Company A would have conducted four transactions to address the two Accounts Payable and two Accounts Receivables line items. Instead, their single outstanding balance to pay off and zero out after processing is 150. Using this example, Company B's books would be a mirror image of Company A's.
This is a simple example, but if there are hundred or thousands of transactions happening between organizations, there can be a considerable decrease in transactional activity and attendant fees. This graphic illustrates the bilateral netting process.
Overview of the bilateral netting process
See Also
You have the option to process accounts payable discount terms and accounts receivable discount terms as they are defined on each side to netted transactions. You can select a Apply Discount to Transactions check box on the Netting Contracts - Primary Information page or the Manual Select Netting - Manual Selection page.
You can set up Manual Select Netting to manually net the accounts payable and accounts receivables transactions, or you can run the Automatic Netting Selection process (TR_NET_ASEL) to net these transactions for any date that occurs on or before the date that you run the pay cycle. The Netting Auto Selection process stores the discount available amounts related to selected accounts payable vouchers and accounts receivable items based on the selection of the Apply Discount to Transactions check box on the Netting Contracts - Primary Information page.
When you run the Netting Close process, TR_NET_CLOSE, the Pay Cycle Manager calls the application engine program (TR_NET_DSCNT) to apply the discounts to the netted transactions. This program updates the netted amounts, balance amounts, and discount applied amounts on the netting tables for Netting Reference IDs that have the apply discount option set. The program will then call on accounts payable to provide the amount of discount taken for the selected accounts payable vouchers and will call on accounts receivable to provide the amount of discount taken for the selected accounts receivables items to complete the Netting Close process.
These are some of the factors that you will want to consider when applying discounts to netted transactions.
While applying discounts to netted transactions, all accounts payable vouchers and accounts receivable items associated with a netting reference are evaluated for discount and a discount is applied wherever applicable. The collection of any accounts receivable item balance, whether partial or final, could be impacted by various factors such as the ability to pay by the customer, the amount of liquidity, and more as an event that happens after the process applies the discount to netted transactions and the information stored in the accounts receivable tables is not subject to reconciliation with the information stored in Netting History tables.
The selection of the Apply Discount to Transactions check box is applied to both Accounts Payable vouchers and Accounts Receivable items.
While applying a discount to netted transactions, accounts payable vouchers and accounts receivable items are not re-sequenced.
You cannot partially deselect an accounts payable voucher or an accounts receivable item when you select the Apply Discount Transaction check box.
Here is an example of bilateral netting transactions where discounts have been applied to netting transactions.
Netting Scenario where AR > AP
|
Gross Amount |
Netting Amount |
Balance Amount |
Deselected Amount |
Earned Discount |
Discount Available |
Discount Taken |
Adjusted Gross Amount |
Netting Status |
AP Voucher |
1500.00 |
1500.00 |
|
|
Y |
30.00 |
|
|
NET |
AP Voucher |
1000.00 |
1000.00 |
|
|
Y |
20.00 |
|
|
NET |
AP Voucher |
500.00 |
500.00 |
|
|
Y |
10.00 |
|
|
NET |
3000.00 |
3000.00 |
|
|
|
60.00 |
|
|
|
|
AR Item |
1500.00 |
1500.00 |
|
|
Y |
30.00 |
|
|
NET |
AR Item |
2000.00 |
1500.00 |
500.00 |
|
Y |
40.00 |
|
|
SPLIT |
AR Item |
500.00 |
|
500.00 |
|
Y |
10.00 |
|
|
BALANCE |
4000.00 |
3000.00 |
1000.00 |
|
|
80.00 |
|
|
|
|
After Applying Discount |
AR>AP |
||||||||
Gross Amount |
Netting Amount |
Balance Amount |
Deselected Amount |
Earn Discount |
Discount Available |
Discount Taken |
Adjusted Gross Amount |
Netting Status |
|
AP Voucher |
1500.00 |
1470.00 |
|
Y |
30.00 |
30.00 |
1470.00 |
NET |
|
AP Voucher |
1000.00 |
980.00 |
|
Y |
20.00 |
20.00 |
980.00 |
NET |
|
AP Voucher |
500.00 |
490.00 |
|
Y |
10.00 |
10.00 |
490.00 |
NET |
|
3000.00 |
2940.00 |
|
60.00 |
60.00 |
2940.00 |
||||
AR Item |
1500.00 |
Y |
30.00 |
30.00 |
1470.00 |
NET |
|||
AR Item |
2000.00 |
1470.00 |
490.00 |
Y |
40.00 |
40.00 |
1960.00 |
SPLIT |
|
AR Item |
500.00 |
147000 |
490.00 |
Y |
10.00 |
10.00 |
490/— |
BALANCE |
|
4000.00 |
2940.00 |
980.00 |
80.00 |
80.00 |
3920.00 |
Before using netting, you must define your:
General Ledger business units.
Payables Vendors, Vendor IDs, and business units.
Receivables Customer IDs and business units.
Market rates and netting account currency codes, to facilitate multicurrency netting.
Netting accounts.
In addition, before defining a bilateral netting relationship, you must set up the following in Payables and Receivables:
Enter a voucher on the Vouchers page in Payables.
Enter an invoice on the Online Pending Item Entry page in Receivables or interface an invoice from your billing application into Receivables.
Run the Receivables Update process (AR_UPDATE) using the Receivables Update page.
See Also
Defining General Ledger Business Units
Entering and Processing Vouchers Online: General Voucher Entry Information
Apply Discount to Transactions |
Select to indicate that the system should consider the discount from the payment terms when calculating netted amounts. . |
Closing Method |
Select Partial, the delivered default value. |
Contact |
Specify the financial contacts for a netting relationship. |
Contract ID |
Enter the netting contract identification number. |
Customer ID |
Enter the unique identifier code for a customer. |
Discount Available Amount |
Displays the amount of discount that is available for payable vouchers and receivable items. This value is calculated when the Apply Discount to Transactions option is selected. |
GL Unit |
Enter the General Ledger business unit. |
Netting Rule ID |
Enter the netting rule identification code. |
Participant ID |
Enter the netting participant identification code. |
Payable Discount Available |
Displays the amount of discount that is available for payable vouchers. This value is calculated when the Apply Discount to Transactions option is selected. |
Receivable Discount Available |
Displays the amount of discount that is available for receivable items. This value is calculated when the Apply Discount to Transactions option is selected. |
Remit Vendor |
Enter the vendor payee. |
Schedule SetID |
Select the correct setID to establish the interval when the netting executes. |
Settlement Date |
Specify the actual date of the settlement payment. |
Vendor ID |
Enter a unique identifier code for a vendor. |
See Also
Understanding the Bilateral Netting Process
To define netting information, use the following components:
This section discusses the steps to set up bilateral nets:
Define participant relationships.
(Optional) Add multiple vendors.
(Optional) Add multiple customers.
Define netting rules with SQL statements.
Enter primary information for netting contracts.
Enter settlement information for netting contracts.
Define voucher netting exclusion parameters.
Understanding Voucher Netting Exclusion
You can define parameters to exclude certain vouchers from payment. The netting exclusion functionality is built to accommodate certain US Federal Government requirements on voucher payments (Financial Systems Integration Office (FSIO) requirement PMC-31, "...allow for the exclusion of payments from agency offset based on user-defined criteria including funding source, object class, vendor type, and vendor number"), but any organization can use this feature to exclude vouchers from netting, based on defined parameters. Although you generally define netting exclusion parameters during the setup phase of voucher payment implementation, you can create or modify these definitions at any time.
This functionality also takes advantage of PeopleSoft's ChartField Utility process. As ChartFields can be renamed, and made active or inactive, the setup of these user-defined parameters is dynamic to enable you to select the appropriate chartfield fieldname and its corresponding values. In addition, you can define multiple sets of exclusion parameters, by defining multiple rows per Exclusion ID, and/or defining multiple Exclusion IDs.
Values entered on the Netting Exclusion Parameters page are stored and used at voucher save time to determine if the voucher should be excluded from the netting process between Payables and Receivables. If an exclusion parameter definition has been created, and a payment falls within the exclusion and effective date parameters, then the payment is excluded from the Payables and Receivables netting process and paid in full. (The system changes the internal voucher netting value to N to indicate the voucher is not applicable to netting.) This applies to payments created normally through the PeopleSoft Pay Cycle process.
Though the Exclude from Netting Parameters and the Netting Rule Definition pages share a similar purpose—defining rules or parameters for the voucher netting process—their results are different. The netting exclusion functionality excludes matching vouchers from payment by setting the internal netting flag to N (not applicable for netting). The netting rules functionality excludes vouchers based on the criteria defined in the rules.
Note. Netting exclusion parameters apply to the entire voucher—not just a particular part of the voucher. If a single data element (or "piece") of a voucher meets the exclusion requirements, the entire voucher is excluded. For example, if a voucher has 100 lines with 200 distributions, and only one distribution qualifies for netting exclusion. In this scenario, the entire voucher and payment schedule—all 200 distributions—is excluded from netting.
See Also
To use the Exclude from Netting functionality with vouchers, you must do the following:
Define vendors as "netting vendors," using the Apply Netting option on the Vendor Information - Payment Options page.
Create vouchers using defined netting vendors.
See Also
Scheduling and Creating Voucher Payments for Online Vouchers
Page Name |
Definition Name |
Navigation |
Usage |
Netting Participants |
NET_PARTICIPANT |
Cash Management, Administer Cash, Netting Participants |
Define the vendor and customer relationships involved in netting. |
Add Multiple Vendors |
NET_VENDOR_ADD |
Click Add Multiple Vendors on the Participant Definition page. |
Search and select multiple vendors associated with a business unit to add to the netting relationship. |
Add Multiple Customers |
NET_CUSTOMER_ADD |
Click Add Multiple Customers on the Participant Definition page. |
Search and select multiple customers associated with a business unit to add to the netting relationship. |
Netting Rules |
NET_NETTING_RULES |
Cash Management, Administer Cash, Netting Rules |
Enter a SQL statement that will be included into the Application Engine Netting selection logic. |
Netting Contracts - Primary Information |
NET_CONTRACT_PRIM |
Cash Management, Administer Cash, Netting Contracts |
Enter primary information for netting contracts. |
Netting Contracts - Settlement Information |
NET_CONTRACT_STL |
Cash Management, Administer Cash, Netting Contracts Select the Settlement Information tab. |
Define all settlement instruction information for a netting contract. |
Netting Exclusion Parameters |
NET_EXCL_PARM |
Cash Management, Administer Cash, Netting Exclusion Parameters |
Define parameters used to automatically exclude certain payments from the AP and AR netting process. |
Access the Netting Participants page (Cash Management, Administer Cash, Netting Participants).
GL Unit (General Ledger business unit) |
For reporting purposes, you must select the unit that is targeted by these transactions, because the transactions affect balances at the general ledger level. |
Vendors
AP Unit (Payables business unit) |
Select the unit that houses the vendors that are entering the netting relationship, and specify the Vendor ID. |
Add Multiple Vendors |
Click to access the Add Multiple Vendors page, and make this relationship a one-to-many or many-to-many relationship (for example, you might want to net the transactions of subsidiaries to a corporation). |
Customers
AR Unit (Receivables business unit) |
Select the unit that houses the customers that are entering the netting relationship, and specify the Customer ID. |
Add Multiple Customers |
Click to access the Add Multiple Customers page, and make this relationship a one-to-many or many-to-many relationship (for example, you might want to net the transactions of subsidiaries to a corporation). |
Access the Add Multiple Vendors page (click Add Multiple Vendors link on the Netting Participants page).
Add Vendors From |
Specify a business unit from which to select vendors. |
Add Vendors |
Select vendors and click this button to add them as participants. |
Access the Add Multiple Customers page (Click the Add Multiple Customers link on the Netting Participants page).
Add Customers From |
Specify a business unit from which to select customers. |
Add Multiple Customers |
Select customers and click this button to add them as participants. |
Access the Netting Rules page (Cash Management, Administer Cash, Netting Rules).
Receivable SQL and Payable SQL |
Enter the appropriate SQL statements to set up the mechanics of the net, and to further define and/or limit which open items are selected. For example: "where I.DEPARTMENT equals 'ABC.'" |
|
Click to add comments regarding SQL statements for the respective (Receivable or Payable) edit box. |
Access the Netting Contracts - Primary Information page (Cash Management, Administer Cash, Netting Contracts).
Primary Information
Pre Approval Flag |
Select to indicate the netting contract is already approved. |
Netting Advice Required |
Select to notify a contact when netting is run. |
Apply Discount to Transactions |
Select to indicate that the system should consider the discount from the payment terms when calculating netted amounts. |
Schedules |
Specify the netting run schedule for the specified Schedule SetID. |
|
Click View Participants to view participants of the specified Participant ID. |
|
Click View Rules to view rules of the specified Netting Rule ID. |
|
Click View Contacts to view contact information for the specified Contact ID. |
|
Click View Schedules to view schedule information for the specified Schedule. |
See Also
Defining Participant Relationships
Defining Netting Rules with SQL Statements
Access the Netting Contracts - Settlement Information page (Cash Management, Administer Cash, Netting Contracts, Settlement Information).
Netting Bank SetID |
Assign a netting SetID; then select the Bank and Account for the netting activities. The netting bank is a virtual bank account: no funds are actually paid into or out of the netting account. It is debited and credited by the netted amount of the AP and AR transactions. |
Disb Bank SetID (disbursement bank setID) |
Select from the available external banks, and specify the settle through Bank and Account. |
Vendor SetID |
Assign a vendor SetID. In the Vendor field, designate the vendor involved in the net and assign a Location and Seq Nbr (sequence number). You enter the vendor ID and sequence number to associate the default bank with that vendor (this is required to support certain payment methods). |
Payment Method |
For the Payables group box, specify if payments are submitted by Automated Clearing House, Direct Debit, EFT, Manual Check, System Check, or Wire Report. For the Receivables group box, specify if payments are received by Check (Check, EFT, etc.), Direct Debit, or Draft. |
Sequence |
Select the order in which balances will net, either: By Account Date (FIFO) (first in first out), By Accounting Date (LIFO) (last in first out), By Due Date (FIFO), By Due Date (LIFO), By Voucher, Highest Gross Balance, or Smallest Gross Balance. |
Deposit Unit |
Define which business unit will receive payment after the net. |
|
Click View Netting Account to view detailed information for the specified netting account. |
|
Click View Disbursement Bank to view detailed information for the specified external bank account. |
|
Click View Vendor Bank to view detailed information for the vendor location. |
Access the Netting Exclusion Parameters page (Cash Management, Administer Cash, Netting Exclusion Parameters).
Select the parameter for excluding the voucher.
When you select Vendor ID, also specify a Vendor name and optionally, a Location.
When you select Vendor Classification, also select a Classification option of Attorney, Employee, HRMS, or Supplier.
In the ChartField Exclusion Parameters region, specify a ChartField and corresponding value on which to base the netting exclusion.
Note. You can only specify one value per defined ChartField name.
Define processing parameters and automatically select your nets using the Automatic Netting Selection process (TR_NET_ASEL).
Page Name |
Definition Name |
Navigation |
Usage |
Automatic Netting Selection |
NET_AUTO_RQST |
Cash Management, Settlements, Bi-Lateral Netting, Automatic Netting Selection |
Set up an automatic process to run bilateral nets. |
Access the Automatic Netting Selection page (Cash Management, Settlements, Bi-Lateral Netting, Automatic Netting Selection).
Contracts for this Schedule |
Click to access the Review Netting Contracts page, and view all contracts associated with the specified Schedule ID. |
Netting Inquiry |
Click to access the Netting Inquiry page, and view information for the associated Netting Reference ID. |
When the Automatic Netting Selection process is complete, use the Review Multiple Netting page to verify and modify the netted information.
See Also
PeopleTools PeopleBook: PeopleSoft Process Scheduler
This section discusses how to:
Enter primary netting information.
Define the settlement instructions.
Set up the payables leg.
(Optional) Add multiple vouchers to the payables leg.
Set up the receivables leg.
(Optional) Add multiple items to the receivables leg.
Add Multiple Items |
Click to add multiple vouchers from a specified business Unit and Vendor ID to your bilateral net. |
Request Status |
Displays either WIP (work in progress) or Submitted. |
Total AP Txns (transactions) |
Total number of Payables transaction items. |
Total AR Txns (transactions) |
Total number of Receivables transaction items. |
Page Name |
Definition Name |
Navigation |
Usage |
Manual Select Netting - Manual Selection |
NET_MANUAL_RQST |
Cash Management, Settlements, Bi-Lateral Netting, Manual Select Netting |
Enter primary information. |
Manual Select Netting - Settlement Inst (settlement instructions) |
NET_MANUAL_RQST1 |
Cash Management, Settlements, Bi-Lateral Netting, Manual Select Netting Select the Settlement Inst tab. |
Set up your settlement instructions. |
Manual Select Netting - Payables |
NET_MAN_RQST_AP |
Cash Management, Settlements, Bi-Lateral Netting, Manual Select Netting Select the Payables tab on the Manual Selection page. |
Set up payables for manual netting. |
Enter Manual Selection - Add Multiple Vouchers |
NET_VOUCHER_ADD |
Click Add Multiple Vouchers on the Manual Select Netting - Payables page. |
Add multiple vouchers to payables for manual netting. |
Manual Select Netting - Receivables |
NET_MAN_RQST_AR |
Cash Management, Settlements, Bi-Lateral Netting, Manual Select Netting Select the Receivables tab on the Manual Selection page. |
Set up receivables for manual netting. |
Enter Manual Selection - Add Multiple Items |
NET_ITEM_ADD |
Click Add Multiple Items on the Manual Select Netting - Receivables page. |
Add multiple items to receivables for manual netting. |
Access the Manual Select Netting - Manual Selection page (Cash Management, Settlements, Bi-Lateral Netting, Manual Select Netting, Manual Selection).
Netting Date |
Displays the effective date of the net. |
Netting Currency |
Select a netting currency. The system converts all amounts and displays them in this defined netting currency. |
Base Currency |
Displays the base currency of the selected GL Unit. |
Submit |
Click to submit the net. Note. Prior to submitting the net, you must complete the other pages in this component. |
Access the Manual Select Netting - Settlement Instructions page (Cash Management, Settlements, Bi-Lateral Netting, Manual Select Netting, Settlement Inst).
Netting Bank |
Click to select your netting bank SetID, and specify the bank and account. |
Disbursement Bank |
Click to select your disbursement bank ID, and specify the bank and account. |
Vendor Bank |
Click the link to select your vendor bank ID. Enter the Vendor, Location, and Sequence Nbr (sequence number). |
Payment Method-Payable |
Select Automated Clearing House, Direct Debit, EFT, Manual Check, System Check, or Wire Report. |
Payment Method-Receivable |
Select Check, Direct Debit, or Draft. |
Deposit Unit |
Define which business unit receives payment after the net. |
See Also
Entering Settlement Information for Netting Contracts
Access the Manual Select Netting - Payables page (Cash Management, Settlements, Bi-Lateral Netting, Manual Select Netting, Payables).
|
Click Voucher Detail to access the Payables Voucher Detail page and view information for the voucher line item. |
Refresh |
When you are finished entering payable transaction items, click to update Total Payment Amount. |
Access the Enter Manual Selection - Add Multiple Vouchers page (click Add Multiple Vouchers on the Manual Select Netting - Payables page).
After you enter a business unit and vendor ID,select each voucher that you want to add and click Add.
Access the Manual Select Netting - Receivables page (Cash Management, Settlements, Bi-Lateral Netting, Manual Select Netting ).
|
Click Show Item Detail to access the Receivables Item Maintenance page, and view information for the receivables line item. |
Refresh |
When you are finished entering receivable transaction items, to update Total Receipt Amount. |
Access the Enter Manual Selection - Add Multiple Items page (click Add Multiple Items on the Manual Select Netting - Receivables page).
After you enter a business Unit and Customer ID, select each item that you want to add and click Add.
After creating manual bilateral nets you'll need to maintain them. Depending on your User ID and security settings, you can edit certain enabled fields on each page. These pages are similar to the manual net creation procedure pages.
This section discusses how to:
Adjust manual net information.
Adjust settlement instructions.
Adjust payables voucher information.
Adjust receivables item information.
See Also
Gross Amount |
Displays the Gross amount, which must equal the netting amount plus balance amount plus deselected amount. However, you can only populate two of these three fields to equal the gross amount, not all three. |
DeSelected Payable |
Displays the payables amount subtracted from the gross amount. |
DeSelected Receivable |
Displays the receivables amount subtracted from the gross amount. |
Page Name |
Definition Name |
Navigation |
Usage |
Adjust Netting - Manual Adjustment |
NET_MANUAL_ADJUST |
Cash Management, Settlements, Bi-Lateral Netting, Adjust Netting |
Adjust manual net information. |
Adjust Netting - Settlement Inst (instructions) |
NET_MANUAL_ADJUST1 |
Click Settlement Instr on the Manual Adjustment page. |
Adjust settlement instructions . |
Adjust Netting - Payables |
NET_MAN_ADJUST_AP |
Click the Settlement Instr link on the Payables page. |
Adjust payables voucher information. |
Adjust Netting - Receivables |
NET_MAN_ADJUST_AR |
Click the Settlement Instr link on the Receivables page. |
Adjust receivables item information. |
Access the Adjust Netting - Manual Adjustment page (Cash Management, Settlements, Bi-Lateral Netting, Adjust Netting).
Process Type |
Indicates whether the net was processed by either Automatic or Manual method. |
Netting Results Payable
The system calculates the amounts based on the transaction entries on the Payables page.
Netted Payable |
Displays the netting amount total. |
Payable Balance |
Displays the balance amount total. |
DeSelected Payable |
Displays the deselected amount total. |
Netting Results Receivable
The system calculates the amounts displayed based on the transaction entries on the Receivables page.
Netted Receivable |
Displays the netting amount total. |
Receivable Balance |
Displays the balance amount total. |
DeSelected Receivable |
Displays the deselected amount total. |
See Also
Access the Adjust Netting - Settlement Instr page (click Settlement Instr on the Manual Adjustment page).
See Also
Entering Settlement Information for Netting Contracts
Access the Adjust Netting - Payables page (Click the Settlement Instr link on the Payables page).
Note. You can only add transaction items. You cannot delete existing or added transactions.
See Also
Setting Up Payables for Manual Netting
Access the Adjust Netting - Receivables page (Click the Settlement Instr link on the Receivables page).
Note. You can only add transaction items—you can't delete existing or added transactions.
See Also
Setting Up Receivables for Manual Netting
This section provides an overview of the multicurrency netting functionality, and discusses how to process multicurrency nets.
PeopleSoft netting includes functionality to automatically adjust netted non-base currency accounting entries to ensure that the netting bank entries are in balance. This functionality requires that you setup certain pages and currency default values.
When you have established the necessary currency codes, no further input is required because the system automatically evaluates and adjusts the necessary netting accounting entries.
The adjustment functionality occurs during the Netting Close process (TR_NET_CLOSE), which the system calls from the Pay Cycle Selection process (AP_PAYSELECT). The Netting Close process analyzes if voucher and item accounting entries meet certain criteria. For example, if netting currency is greater than or less than the base currency. If the entries match the criteria, the Netting Close process adjusts them by updating the AR (PAYMENT_ITEM) and AP (PAYMENT_VCHR_XREF, VOUCHER, VOUCHER_LINE, DISTRIB_LINE) information prior to posting in AP and AR. Posting creates accounting entries, therefore, the netting adjustment occurs prior to posting to avoid the additional work of adjusting accounting entries.
Here is an example of the netting adjustment functionality when the net involves Japanese yen (JPY) and United States dollars (USD):
Netting Base Amount = 10000 JPY.
Netting Foreign Amount = 100 USD.
Rate = 100 JPY/USD.
Summarized receivables amount for netting = 100 USD (10001 JPY).
Summarized payables amount for netting = 100 USD (9999 JPY).
Given the above, the system calculates that:
The Netting Base Amount of 10000 JPY is less than the receivables amount of 10001 JPY, and subtracts 1 JPY from the receivables total.
The Netting Base Amount of 10000 JPY is greater than the payables amount of 9999 JPY, and adds 1 JPY to the payables total.
If you are netting bank accounts that are defined with different currencies, you must ensure that:
You have established an exchange rate between two different currency codes on the Market Rates page.
You have established as many valid currencies as needed by the specific netting bank account on the Netting Accounts - Valid Currencies (BANK_ACCT_CURR_SEC) page. For example, if you are netting between two accounts (one using JPY, one using USD) you must define both JPY and USD as valid currencies for both accounts.
See Also
To process multicurrency nets:
For the AP Voucher Entry confirm that:
You define the Curr (currency) field on the Invoice Information page with the convert into currency.
You define the Payment Currency field on the Invoice Information - Payments: Payment Options page with the convert into currency.
Approve the AP Voucher, but do not post it.
For the AR Item Entry confirm that:
You define the Control Currency field on the Group Control page with the convert into currency.
You define the Currency field on the Pending Item 1 page with the convert into currency.
Post the AR vouchers using the Group Control - Group Action page. (You can post AR vouchers as they are not evaluated by the Net Close process.)
Run the Receivable Update process (AR_UPDATE).
Create a manual net using the Manual Netting pages, being sure to define the Netting Currency field with the convert into currency. When you complete creating the manual net, click Submit.
Approve the multicurrency net using the Review Multiple Netting page.
Establish voucher payment selection criteria for the pay cycle using the Payment Selection Criteria page.
Process the pay cycle and create the payment using the Pay Cycle Manager page.
Post the voucher using the Payment Posting Request page.
Run the Receivable Update process (AR_UPDATE) again to close the receivables nets.
Review the resulting accounting entry and payment information on the following pages:
(AP) Voucher Accounting Entries
(AR) Group Control - Accounting Entries
Payment Control - Accounting Entries
Note. Remember that any AP vouchers that are posted before the Netting Close process runs do not encounter the rounding analysis of the netting adjustment process. Their associated accounting entries are not adjusted.
See Also
Entering Invoice Information for Online Vouchers
Running Voucher and Payment Posting
Changing and Reviewing Item Information
This section discusses how to:
Approve nets.
Cancel nets.
Page Name |
Definition Name |
Navigation |
Usage |
Approve Netting |
NET_NETTING_ADMIN |
Cash Management, Settlements, Bi-Lateral Netting, Approve Netting |
Approve nets. |
Cancel Netting |
NET_NETTING_ADMIN |
Cash Management, Settlements, Bi-Lateral Netting, Cancel Netting |
Cancel nets. |
Access the Approve Netting page (Cash Management, Settlements, Bi-Lateral Netting, Approve Netting).
Search |
Specify search criteria and click the button to retrieve data on multiple nets. Your results appear in the Selected Nets grid. |
Status |
Select from Approved, Cancelled, Closed, or Open. |
Reference |
Click the link to access the bilateral netting pages, and modify transaction information. |
|
Click to adjust the selected net. |
Select |
Select an item's check box, then approve or cancel net. The selected net(s) status changes to Approved or Cancelled. Once netting contracts are approved, they are "locked" and can't be edited. Select Re-Open to unlock approved netting contracts for modifications. |
Access the Cancel Netting page (Cash Management, Settlements, Bi-Lateral Netting, Cancel Netting).
Page fields and functionality are similar to those discussed in Administering Nets. However, you can only cancel nets with an Open Status.
See Also
Once you select (by manual or automatic methods) and approve nets, you close them in both Payables and Receivables.
You close payables nets by creating payment selection criteria and running Pay Cycle Manager. If there is any remaining payables net balance (balance is less than or greater than zero), you must create a new payment selection criteria and run Pay Cycle Manager again.
To close receivables nets, you must run the Request Receivables Update process, which updates the customer information with the invoice netting payment created in the netting process.
The Net Closing Process also contains the multicurrency net adjustment functionality. For nets involving multiple currencies this functionality evaluates if the payables and receivables accounting entries are in balance, given a defined currency conversion rate. The system then automatically adjusts them as necessary prior to payables and receivables posting.
See Also
Multicurrency Netting Functionality
Here is a more detailed look at the Netting Closing Application Engine processes, (TR_NET_CLOSE) and (TR_NET_ARCLS), which launch from Pay Cycle Manager (AP_APY2015). These processes close the netting population of the AR and AP transactions that are selected for netting. Closing refers to updating the transactions in the netting tables as well as updating transactions in the AP and AR tables. Inserts are done in certain situations. (For example, if an AP payment is greater than the AR balance, PeopleSoft will insert a new line in AP for the remaining balance not offset by the receivable amount.)
You can inquire on your bilateral netting contract and relationship information.
Page Name |
Definition Name |
Navigation |
Usage |
Review Netting Contracts |
NET_SCHD_CNTRC |
Cash Management, Settlements, Bi-Lateral Netting, Review Netting Contract |
Search your netting data by netting contract. |
Netting Inquiry |
NET_INQUIRY_HDR |
Cash Management, Settlements, Bi-Lateral Netting, Review Single Netting |
Review information on a single netting relationship. |
Review Multiple Netting |
NET_NETTING_ADMIN |
Cash Management, Settlements, Bi-Lateral Netting, Review Multiple Netting |
Review information on multiple netting contracts. |