Understanding AR/AP Netting

Note: Country-specific functionality for vouchers exists for Japan, Brazil, Denmark, Finland, Norway, and Sweden.

See also:

• "Adding Bar Code Information to Vouchers for Brazil" in the JD Edwards EnterpriseOne Applications Localizations for Brazil Implementation Guide.

• " Calculating Withholding for Japan" in the JD Edwards EnterpriseOne Applications Localizations for Japan Implementation Guide.

• "Preparing Vouchers and Credit Notes for Payment Processing" in the JD Edwards EnterpriseOne Applications Localizations for Denmark Implementation Guide.

• "Preparing Vouchers and Credit Notes for Payment Processing" in the JD Edwards EnterpriseOne Applications Localizations for Finland Implementation Guide.

• "Preparing Vouchers and Credit Notes for Payment Processing" in the JD Edwards EnterpriseOne Applications Localizations for Norway Implementation Guide.

• "Preparing Vouchers and Credit Notes for Payment Processing" in the JD Edwards EnterpriseOne Applications Localizations for Sweden Implementation Guide.

When you do a large volume of business with an organization as both a customer and a supplier, you can perform accounts receivable netting and accounts payable netting (AR/AP netting) to increase efficiency and reduce operational costs by consolidating transactions in the JD Edwards EnterpriseOne Accounts Receivable and JD Edwards EnterpriseOne Accounts Payable systems.

When you perform AR/AP netting in JD Edwards EnterpriseOne software, you reclassify transactions in the JD Edwards Accounts Payable system to the JD Edwards EnterpriseOne Accounts Receivable and vice versa. For example, you can reclassify debit memos in the JD Edwards EnterpriseOne Accounts Payable system to invoices in the JD Edwards EnterpriseOne Accounts Receivable system, and reclassify credit memos in the JD Edwards EnterpriseOne Accounts Receivable system to vouchers in the JD Edwards EnterpriseOne Accounts Payable system.

Depending on to which system you reclassify transactions, you either perform AR netting or AP netting:

• When you perform AR netting, you reclassify transactions in the JD Edwards EnterpriseOne Accounts Payable system to the JD Edwards EnterpriseOne Accounts Receivable system.

• When you perform AP netting, you reclassify transactions in the JD Edwards EnterpriseOne Accounts Receivable system to the JD Edwards EnterpriseOne Accounts Payable system.

AR/AP netting is similar to the credit reimbursement process in JD Edwards EnterpriseOne software; however, AR/AP netting is a manual process and includes these additional features:

• Enables you to net unapplied cash (RU).

• Enables a bilateral reclassification of transactions in the JD Edwards EnterpriseOne Accounts Receivable and JD Edwards EnterpriseOne Accounts Payable systems.

• Provides an audit trail of netting transactions.

See "Netting Accounts Receivable and Accounts Payable" in the JD Edwards EnterpriseOne Applications Accounts Receivable Implementation Guide.