Corporate Netting

Netting is used between divisions in a group. The objective is to minimize the number of payment transactions between internal divisions and optimize currency variances.

All divisions in a group report open customer and supplier invoices against other divisions at a certain date to a netting center.

The netting center can be either an internal function or managed by a third party, such as a bank.

The netting center calculates who shall pay and who shall get paid certain amounts. They provide feedback and transfer the amounts between the divisions' bank accounts.

Each division allocates the information to the open invoices and manages the accounting for bank transactions.

Accounts Payable (AP) payment method (CRS071)

Parameter for 'Corporate netting' in 'AP Payment Method. Open' (CRS071) for payment class 3-'Electronic payment', bank transfer 3-'Electronic payment', and bank confirmation 3-'Yes, electronic by ABS' in (CRS071). This parameter allows the payment proposals to be negative in 'Suppl Payment Proposal. Open' (APS130) and to select corporate netting supplier invoices in (APS130). It is recommended to create new payment methods for 'Corporate netting'.

Accounts Receivable (AR) payment method (CRS076)

Parameter for 'Corporate netting' in 'AR Payment Method. Open' (CRS076) for payment class 3-'Bank transfer'. This parameter allows the payment proposals to be negative in 'Outgoing Payment Proposal. Open' (APS330) and to select corporate netting customer invoices in (APS330). It is recommended to create new payment methods for 'Corporate netting'.

AP payment proposal (APS130)

Parameter for 'Corporate netting' (yes/no) in 'Supplier Payment Proposal. Create' (APS131). This decides if only corporate netting supplier invoices are selected in the payment proposal.

If you do not select this parameter, supplier invoices with netting payment methods are not selected in the payment proposal.

When you select this parameter, you cannot select 'Ordinary payment', 'Recurring payment', 'Payment request', 'Payment type', and 'Match credit note' in (APS131).

Negative payments are managed when a corporate netting payment method is used.

Outgoing payment proposal (APS330)

Parameter for 'Corporate netting' (yes/no) in 'Outgoing Payment Proposal. Create' (APS335). This decides if only corporate netting customer invoices are selected. When you select this parameter, all kinds of AR invoices are selected, ordinary and credit invoices. You can only select 3-'Select AR items'.

If you do not select this parameter, customer invoices with netting payment methods are not selected in the outgoing payment proposal.

When you select this parameter, the AP payment method must be a corporate netting method, and you cannot select 'Payment type' in (APS335).

Negative payments are managed when a corporate netting payment method is used.

In 'Outgoing Payment Proposal. Open' (APS330), you must always have 'Accounts payable payout' set to '1' in 'Customer. Open' (CRS610) in order to pay customer invoices in (APS330).

Transactions APS130MI and APS330MI

APS130MI:
  • APS130MI.CreateProposal

    A selection field for 'Corporate netting' exists, as in (APS131) with the same controls.

  • APS130MIGetHead2 and APS130MIGetHead

    The ‘Corporate netting’ field is added last in the output string. The field is in the payment proposal header in (APS130) and (APS330).

APS330MI:

  • APS330MI.CreateProposal

    Selection fields for 'Corporate netting' and 3-'Select AR item' exist, as in (APS335) with the same controls.

Other

A normal principle is used to create one payment order per currency both in (APS130) and (APS330).

You can find one ad hoc report example in KB 2174482.

Process:
  1. You can create netting proposals with (APS130) and (APS330), with a corporate netting payment method.
  2. The reporting file to the netting center is created and exported.
  3. The netting center reports back a list of the invoices to be cleared. This list is compared to the proposals in (APS130) and (APS330) and invoices are deleted or added, if necessary.
  4. The proposals are confirmed in (APS130) and (APS330).
  5. The file including the currency rates given from the netting center is imported to ABS with a custom mapping, and the open items is cleared by normal ABS handling.

Functional limitations

(APS330):
  • Processing of split VAT payments, which is introduced only to Poland.
  • E-register validation of VAT in a supplier payment proposal, which is applicable only to Poland and Slovakia.
  • Prepayments processing
  • Netting to AP records
  • Recurring payments
  • Market-specific functionalities
  • Draft payments processing
  • Withholding tax processing
(APS130):
  • Withholding tax processing
  • Prepayments processing
  • Netting to AR records
  • Recurring payments
  • Market-specific functionalities

(APS330) and (APS130):

Invoices with corporate netting payment methods can be manually paid in AP and AR. They are not stopped for payment in (APS120), (APS147), (GLS110), (ARS105), (ARS110), (ARS040), and (ABS100).

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