Cross-Currency Settlements in Netting

Create netting settlements for Payables invoices and Receivables transactions when the invoice currency is different from the transaction currency. This allows companies that transact in multiple currencies to offset the supplier and customer balances which may be in different currencies.

Previously, netting was restricted to Payables and Receivables in the same currency. With this update, you can include transactions with differing currencies in a single netting settlement. All selected Payables and Receivables are converted to a designated settlement currency using defined cross-currency conversion rates.

These are the business benefits:

• Enhances organization liquidity management.
• Streamline reconciliation processes.
• Supports multinational businesses transacting with suppliers and customers in multiple currencies.
• Provides greater flexibility in offsetting obligations and reducing settlement costs.

Steps to Enable and Configure

To set up for cross-currency settlements:

1. Navigate to the Create Netting Agreements page. Create a netting agreement with the Netting Currency Rule as "Net across currencies".

Netting Agreement Setup

2. Choose a settlement currency. This is the currency in which the amounts would be settled.
3. Choose "All Currencies" or a specific currency for the Payables Invoice Currency and Receivables Transaction Currency. This selection determines the invoices and transactions that are selected for netting.

Tips And Considerations

• The payment currency of the Payables invoices must match the settlement currency of the netting agreement for the invoice to be selected.
• All the conversion rates must be defined prior to running the netting settlement. These include the cross-currency conversion rates and payment conversion rates.
• You can't update the amounts for a cross-currency settlement at the review stage.

Access Requirements

No new access requirements