AP/ AR Netting Set ups and transactions

Setups required for AP/AR Netting:

1. Netting control Account:
In GL module
Path: Setup>Financials>Flexfields>Key>Values
Segment qualifier for netting control account = Liability

2. Netting bank, branch and bank account.
Netting flag to be set as yes for the bank account
use netting control account in placeof cash and cash clearing account

Note:
? Reason for defining netting control account.
:) To facilitate us to use it as cash account while defining netting bank account

? Why should you use netting control account in place of netting bank account
:) As you not actually paying or receiving cashwhile you are performing netting

3. Netting receipt class
Receivables module
path: setup>receipts>receipt classes

? Why do we need a netting receipt class
:) To facilitate the system to create a receipt automatically specifying the mode in which we received this receipt as netting

4.Netting Agreement
Canbe created either from payables or receivables
path(AP) payments>netting>netting agreement
path(AR) receipts>netting>netting agreement


5. Netting batch
Picks the invoices and AR transactions to be netted as per the criteria specified in the netting agreement.

6. Submit the netting batch.Review the invoices and transactions picked. Resubmit the batch and viewthe proposed and final netting reports.