Annual and Final Settlement

This document describes how to set up and manage trade agreement annual and final settlements.

Introduction

Settlement is the final calculation carried out for the recipients included in the trade agreement. After the validity of the trade agreement has passed, a settlement is created. For trade agreements that cover several years, annual settlements are made at the end of year, or after the validity of the agreement has passed. It is also possible to create a settlement before the agreement’s end date.

Advances and periodic settlements that have been credited to the recipient are deducted from the final settlement. When advances and periodic settlements credited are more than the accumulated accruals in the trade agreement, a debit invoice is created for the adjustment.

Settlements are created through invoices in the batch order entry process. These invoices could either be credit, debit, or zero.

Manage annual and final settlements

Final settlements are created in 'Trade Agreement Payout. Open' (OIS445). This can be accessed via related option 15 in 'Trade Agreement. Open' (OIS430).

Advances, periodic settlements, and final settlements are managed in (OIS445). The type of settlement created is controlled by the option selected.

The annual/final settlement is created by selecting option 90 on (OIS445/B1). An adjustment record is created with status 10-'Ready for prop'. It is mandatory to enter the year of the settlement. If the agreement spans several years, annual settlements are created for the agreement.

A final settlement proposal can be generated through a related option 20-‘Crt Proposal’ in (OIS445). This allows you to validate the final settlement in 'Suggested Trade Agr Payout Amount. Open' (OIS446) before generating a credit/debit customer order for the trade agreement.

The final adjustment is then calculated and credited by selecting related option 35-'Crt adv/stl/pre'. The status of the final settlement is updated to 90-'Process completed'.

If the final settlement is set to on hold, settlement can be released via relation option 22-'Release for settlement'.

Annual and final settlements are paid using credit invoices, which are transferred to account receivable using the regular invoice routine.

Once final settlement is credited to the recipient, a record is created in the trade agreement transaction file in 'Trade Agreement Transaction File. Open' (OIS435) with transaction line type 15-'Advance and settlement' indicating the credited amount and the credit invoice created.

The parameter 'Settled' is activated for the transactions in the trade agreement transaction file, indicating that the trade agreement is now settled. A document is printed for the final settlement OIS447PF.

When a trade agreement is fully settled, the agreement is updated to status 90-'Finished'.

Note: When ‘check paid invoices’ is activated, processing of the final settlement is not allowed if open invoices exist for the trade agreement.