Trade Agreements - Generating Value across Recipients
This document is a guide on how to set up and manage trade agreements with a cross-recipient parameter activated.
Introduction
A trade agreement with multiple recipients that belong to the same organization can be defined as having a common accumulated generating value to retrieve the rate used to calculate accruals, advances, and settlements for each recipient. The generating value used by all recipients connected to the agreement is accumulated and stored in the blank recipient.
It is mandatory to enter a blank recipient in 'Trade Agreement Recipients. Open' (OIS431), which is used to store the accumulated generating value for qualified customer invoiced lines of all connected recipients.
Setup
- Select the 'Cross recipient' parameter on 'Trade Agreement. Open' (OIS430/F) to activate accumulation of generating value in a blank recipient.
- You must create a blank recipient in (OIS431). You cannot set the agreement to active if there is no blank recipient defined.
- The recipient rate in (OIS431) and the scale rates in 'Trade Agreement Scale Rates. Open' (OIS432) that will be used for the whole agreement are only defined in the blank recipient. You cannot define recipient rates and scale rates for other recipients connected to the agreement.
- Cross recipient can only be activated when:
- trade agreement is not active (status 40)
- there are no scale rates defined in (OIS432) for recipients connected in the trade agreement.
- Cross recipient can only be deactivated when:
- trade agreement is not active (status 40)
- blank recipient is not defined in (OIS431)
- there are no transaction file records in 'Trade Agreement Transaction File. Open' (OIS435).
- Only the rates are defined in the blank recipient. Other parameters like advance percent, hold settlement, maximum paying unit, and maximum agreed amount are still defined per recipient.
- You cannot copy a blank recipient to another recipient and vice versa.
Manage accruals
For qualified customer invoiced lines, the rate for the whole agreement is retrieved from the rates defined in the blank recipient. You cannot define rates for other recipients connected to the trade agreement.
Rules to retrieve the rates from the blank recipient to calculate the reservation amount of invoices in the transaction file are the same. See Reservation rates for rules on recipient rate in (OIS431) and recipient scale rates in (OIS432).
- In (OIS433), only the accumulated generating value of all recipients is displayed.
- In (OIS434), only the accumulated generating value of all recipients per period is displayed.
When transactions are reversed by selecting the 'Rev transaction' parameter in 'Trade Agreement Calculation. Open' (OIS450), the generating value of the blank recipient is reduced by the reversed transactions.
The recipient rate and scale rates defined in the blank recipient can be modified during the lifespan of the agreement. When rates are modified and 'Update rate' is selected in (OIS450), a new record is displayed in the transaction file of the connected recipients. The rate retrieved to calculate the new reservation amount is from the blank recipient. See Reservation rates for rules on recipient rate in (OIS431) and recipient scale rates in (OIS432).
When invalid transactions are reversed by selecting the 'Re inv trans' parameter in (OIS450), the generating value of the blank recipient is reduced by the reversed invalid transactions.
Manage advances and periodic settlements
The advance and periodic settlement processes are the same as those in the standard trade agreement functionality. (See Advances and Periodic Settlements) with the difference on how the rates are retrieved for the settlement. All recipients connected to the agreement use the same rate defined in the blank recipient.
- When advance method is set to 1-'Fixed percent' on (OIS430/E), the rate retrieved is from the blank recipient in (OIS431).
- When advance method is set to 2-'Dynamic percent' on (OIS430/E) and scale code on (OIS430/F) is set to 0-'Best possible trade agreement rate', the rate retrieved is based on the accumulated generating value of the selected settlement periods of the blank recipient and its corresponding rate.
- When advance method is set to 2-'Dynamic percent' on (OIS430/E) and scale code on (OIS430/F) is set to 1-'Graduated trade agreement rate', the rate retrieved is based on a graduated methodology where parts of the selected periods receive different trade agreement rates. The rates retrieved are based on the accumulated generating value per period of the blank recipient.
Limitations
- Generating value across recipients is not available for fixed amount trade agreements.
- Existing trade agreements with transactions cannot be changed to utilize this functionality.
- You cannot exclude recipients from using the shared aggregation if they are connected to the trade agreement.