Managing Bilateral Netting

This chapter provides an overview of bilateral netting, discusses the prerequisite tasks, and discusses how to:

Click to jump to parent topicUnderstanding the Bilateral Netting Process

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:

There are two netting closing methods: partial and full.

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 Receivable 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 hundreds 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

Running Document Tolerances

Processing Pay Cycles

Bilateral Netting

Click to jump to top of pageClick to jump to parent topicDiscounts Applied to Netted Transactions

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.

  1. 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.

  2. The selection of the Apply Discount to Transactions check box is applied to both Accounts Payable vouchers and Accounts Receivable items.

  3. While applying a discount to netted transactions, accounts payable vouchers and accounts receivable items are not re-sequenced.

  4. 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

 

Click to jump to parent topicPrerequisites

Before using netting, you must define your:

In addition, before defining a bilateral netting relationship, you must set up the following in Payables and Receivables:

  1. Enter a voucher on the Vouchers page in Payables.

  2. Enter an invoice on the Online Pending Item Entry page in Receivables or interface an invoice from your billing application into Receivables.

  3. Run the Receivables Update process (AR_UPDATE) using the Receivables Update page.

See Also

Defining Netting Accounts

Defining General Ledger Business Units

Entering and Processing Vouchers Online: General Voucher Entry Information

Running Receivable Update

Click to jump to parent topicCommon Elements in This Chapter

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

Click to jump to parent topicSetting Up Bilateral Nets

To define netting information, use the following components:

This section discusses the steps to set up bilateral nets:

  1. Define participant relationships.

  2. (Optional) Add multiple vendors.

  3. (Optional) Add multiple customers.

  4. Define netting rules with SQL statements.

  5. Enter primary information for netting contracts.

  6. Enter settlement information for netting contracts.

  7. 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 U.S. Federal Government requirements on voucher payments (Financial Systems Integration Office [FSIO] requirement PMC-31, to "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 field name 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

Establishing Pay Cycles

Processing Pay Cycles

Click to jump to top of pageClick to jump to parent topicPrerequisites

To use the Exclude from Netting functionality with vouchers, you must do the following:

See Also

Scheduling and Creating Voucher Payments for Online Vouchers

Click to jump to top of pageClick to jump to parent topicPages Used to Set Up Bilateral Nets

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.

Click to jump to top of pageClick to jump to parent topicDefining Participant Relationships

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).

Click to jump to top of pageClick to jump to parent topicAdding Multiple Vendors

Access the Add Multiple Vendors page (click the Add Multiple Vendors link on the Netting Participants page).

AP Unit

Specify a business unit from which to select vendors.

Add Vendors

Select vendors and click this button to add them as participants.

Click to jump to top of pageClick to jump to parent topicAdding Multiple Customers

Access the Add Multiple Customers page (click the Add Multiple Customers link on the Netting Participants page).

AR Unit

Specify a business unit from which to select customers.

Add Customers

Select customers and click this button to add them as participants.

Click to jump to top of pageClick to jump to parent topicDefining Netting Rules with SQL Statements

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.

Click to jump to top of pageClick to jump to parent topicEntering Primary Information for Netting Contracts

Access the Netting Contracts - Primary Information page (Cash Management, Administer Cash, Netting Contracts, Primary Information).

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

Defining Financial Contacts

Click to jump to top of pageClick to jump to parent topicEntering Settlement Information for Netting Contracts

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.

Click to jump to top of pageClick to jump to parent topicExcluding Vouchers from Netting

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.

Click to jump to parent topicSelecting Nets Automatically

Define processing parameters and automatically select your nets using the Automatic Netting Selection process (TR_NET_ASEL).

Click to jump to top of pageClick to jump to parent topicPages Used to Automatically Select Nets

Page Name

Definition Name

Navigation

Usage

Automatic Netting Selection

NET_AUTO_RQST

Cash Management, Bi-Lateral Netting, Automatic Netting Selection, Automatic Netting Selection

Set up an automatic process to run bilateral nets.

Click to jump to top of pageClick to jump to parent topicGenerating the Automatic Netting Selection Process

Access the Automatic Netting Selection page (Cash Management, Bi-Lateral Netting, Automatic Netting Selection, 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

Administering Nets

Click to jump to parent topicCreating Nets Manually

This section discusses how to:

  1. Enter primary netting information.

  2. Define the settlement instructions.

  3. Set up the payables leg.

  4. (Optional) Add multiple vouchers to the payables leg.

  5. Set up the receivables leg.

  6. (Optional) Add multiple items to the receivables leg.

Click to jump to top of pageClick to jump to parent topicCommon Elements in This Section

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.

Click to jump to top of pageClick to jump to parent topicPages Used to Manually Create Nets

Page Name

Definition Name

Navigation

Usage

Manual Selection

NET_MANUAL_RQST

Cash Management, Bi-Lateral Netting, Manual Select Netting, Manual Selection

Enter primary information.

Manual Select Netting - Settlement Inst (settlement instructions)

NET_MANUAL_RQST1

Cash Management, Bi-Lateral Netting, Manual Select Netting, Settlement Inst

Set up your settlement instructions.

Manual Select Netting - Payables

NET_MAN_RQST_AP

Cash Management, Bi-Lateral Netting, Manual Select Netting, Payables

Set up payables for manual netting.

Enter Manual Selection (vouchers)

NET_VOUCHER_ADD

Click the Add Multiple Vouchers link 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, Bi-Lateral Netting, Manual Select Netting, Receivables

Set up receivables for manual netting.

Enter Manual Selection (items)

NET_ITEM_ADD

Click the Add Multiple Items link on the Manual Select Netting - Receivables page.

Add multiple items to receivables for manual netting.

Click to jump to top of pageClick to jump to parent topicEntering Primary Information

Access the Manual Selection page (Cash Management, 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.

Click to jump to top of pageClick to jump to parent topicDefining Settlement Instructions

Access the Manual Select Netting - Settlement Instructions page (Cash Management, 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

Click to jump to top of pageClick to jump to parent topicSetting Up Payables for Manual Netting

Access the Manual Select Netting - Payables page (Cash Management, 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.

Click to jump to top of pageClick to jump to parent topicAdding Multiple Vouchers to Payables for Manual Netting

Access the Enter Manual Selection (vouchers) page (click the Add Multiple Vouchers link 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.

Click to jump to top of pageClick to jump to parent topicSetting Up Receivables for Manual Netting

Access the Manual Select Netting - Receivables page (Cash Management, Bi-Lateral Netting, Manual Select Netting, Receivables).

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.

Click to jump to top of pageClick to jump to parent topicAdding Multiple Items Receivables for Manual Netting

Access the Enter Manual Selection (items) page (click the Add Multiple Items link 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.

Click to jump to parent topicAdjusting Manually Netted Information

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:

  1. Adjust manual net information.

  2. Adjust settlement instructions.

  3. Adjust payables voucher information.

  4. Adjust receivables item information.

See Also

Creating Nets Manually

Click to jump to top of pageClick to jump to parent topicCommon Elements Used in This Section

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.

Click to jump to top of pageClick to jump to parent topicPages Used to Adjust Manually Netted Information

Page Name

Definition Name

Navigation

Usage

Manual Adjustment

NET_MANUAL_ADJUST

Cash Management, Bi-Lateral Netting, Adjust Netting, Manual Adjustment

Adjust manual net information.

Adjust Netting - Settlement Instr (instructions)

NET_MANUAL_ADJUST1

Cash Management, Bi-Lateral Netting, Adjust Netting, Settlement Instr

Adjust settlement instructions .

Adjust Netting - Payables

NET_MAN_ADJUST_AP

Cash Management, Bi-Lateral Netting, Adjust Netting, Payables

Adjust payables voucher information.

Adjust Netting - Receivables

NET_MAN_ADJUST_AR

Cash Management, Bi-Lateral Netting, Adjust Netting, Receivables

Adjust receivables item information.

Click to jump to top of pageClick to jump to parent topicAdjusting Manual Net Information

Access the Manual Adjustment page (Cash Management, Bi-Lateral Netting, Adjust Netting, Manual Adjustment).

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

Creating Nets Manually

Click to jump to top of pageClick to jump to parent topicAdjusting Settlement Instructions

Access the Adjust Netting - Settlement Instr page (Cash Management, Bi-Lateral Netting, Adjust Netting, Settlement Instr).

See Also

Entering Settlement Information for Netting Contracts

Click to jump to top of pageClick to jump to parent topicAdjusting Payables Voucher Information

Access the Adjust Netting - Payables page (Cash Management, Bi-Lateral Netting, Adjust Netting, Payables).

Note. You can only add transaction items. You cannot delete existing or added transactions.

See Also

Setting Up Payables for Manual Netting

Click to jump to top of pageClick to jump to parent topicAdjusting Receivables Item Information

Access the Adjust Netting - Receivables page (Cash Management, Bi-Lateral Netting, Adjust Netting, Receivables).

Note. You can only add transaction items—you can't delete existing or added transactions.

See Also

Setting Up Receivables for Manual Netting

Click to jump to parent topicProcessing Multicurrency Nets

This section provides an overview of the multicurrency netting functionality, and discusses how to process multicurrency nets.

Click to jump to top of pageClick to jump to parent topicMulticurrency Netting Functionality

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):

Given the above, the system calculates that:

Click to jump to top of pageClick to jump to parent topicPrerequisites

If you are netting bank accounts that are defined with different currencies, you must ensure that:

See Also

Defining Market Rates

Defining Netting Accounts

Click to jump to top of pageClick to jump to parent topicProcessing Multicurrency Nets

To process multicurrency nets:

  1. For the AP Voucher Entry confirm that:

  2. Approve the AP Voucher, but do not post it.

  3. For the AR Item Entry confirm that:

  4. 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.)

  5. Run the Receivable Update process (AR_UPDATE).

  6. 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.

  7. Approve the multicurrency net using the Review Multiple Netting page.

  8. Establish voucher payment selection criteria for the pay cycle using the Payment Selection Criteria page.

  9. Process the pay cycle and create the payment using the Pay Cycle Manager page.

  10. Post the voucher using the Payment Posting Request page.

  11. Run the Receivable Update process (AR_UPDATE) again to close the receivables nets.

  12. Review the resulting accounting entry and payment information on the following pages:

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

Administering Nets

Creating Nets Manually

Closing Nets

Entering Invoice Information for Online Vouchers

Running Voucher and Payment Posting

Reviewing Voucher Information

Entering Pending Items

Posting and Unposting Groups

Entering Pending Items

Changing and Reviewing Item Information

Click to jump to parent topicAdministering Nets

This section discusses how to:

Click to jump to top of pageClick to jump to parent topicPages Used to Administer Nets

Page Name

Definition Name

Navigation

Usage

Approve Netting

NET_NETTING_ADMIN

Cash Management, Bi-Lateral Netting, Approve Netting, Approve Netting

Approve nets.

Cancel Netting

NET_NETTING_ADMIN

Cash Management, Bi-Lateral Netting, Cancel Netting, Cancel Netting

Cancel nets.

Click to jump to top of pageClick to jump to parent topicApproving Nets

Access the Approve Netting page (Cash Management, Bi-Lateral Netting, Approve 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.

Click to jump to top of pageClick to jump to parent topicCanceling Nets

Access the Cancel Netting page (Cash Management, Bi-Lateral Netting, Cancel 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

Administering Nets

Click to jump to parent topicClosing Nets

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

Running Document Tolerances

Processing Pay Cycles

Bilateral Netting

Click to jump to top of pageClick to jump to parent topicUnderstanding the Net Closing Process in Pay Cycle Manager

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.)

Click to jump to parent topicInquiring on Bilateral Nets

You can inquire on your bilateral netting contract and relationship information.

Click to jump to top of pageClick to jump to parent topicPages Used to Inquire on Bilateral Nets

Page Name

Definition Name

Navigation

Usage

Review Netting Contracts

NET_SCHD_CNTRC

Cash Management, Bi-Lateral Netting, Review Netting Contracts, Review Netting Contracts

Search your netting data by netting contract.

Netting Inquiry

NET_INQUIRY_HDR

Cash Management, Bi-Lateral Netting, Review Single Netting, Netting Inquiry

Review information on a single netting relationship.

Review Multiple Netting

NET_NETTING_ADMIN

Cash Management, Bi-Lateral Netting, Review Multiple Netting, Review Multiple Netting

Review information on multiple netting contracts.