26 Overview to Receivables and Payables Netting

This chapter contains the topic:

26.1 About Receivables and Payables Netting

If you have customers who are also your suppliers, you can use the A/P Standalone Netting program (P03455) to quickly determine your net position and offset the open Accounts Receivable and Accounts Payable transactions. When you evaluate your net position, you calculate the net amount due from or due to another organization. This allows you and the other organization to mutually resolve your open transactions with a single payment. Using the Accounts Payables and Accounts Receivables Netting process, you can quickly process:

  • Vouchers by using them to offset what your customer owes you.

  • Payments from your customers that they have already adjusted, by subtracting what is due to them.

When you perform the netting process, the system closes transactions in one system and creates a corresponding original document in the other system for the opposite amount.

For example, if you owe your supplier/customer 1,000 and your supplier/customer owes you 1,500, you can use the netting process to generate a credit memo in the Accounts Receivable system for -1,000, and create a matching document for 1,000 that closes the voucher in the Accounts Payable system. When you process receipts for the customer, you will apply the receipt to the invoices for a net amount of 500.

Receivables and payables netting consists of:

  • Netting receivables and payables

  • Printing netting reports