Customer and Supplier Balance Netting

Transcription

1 ERP CLOUD Custmer and Supplier Balance Netting Oracle Financials fr EMEA TABLE OF CONTENTS 1. Purpse f the dcument Assumptins and Prerequisites Feature Specific Setup... 5 Security Assigning the Netting Rle... 5 Netting Payment Methd Setup... 6 Netting Dcument Sequencing Setup... 7 Netting Bank Accunt Setup... 8 Netting Receipt Class Setup Receivables System Optins Setup Allw payment f unrelated transactins Manage Transactin Type Setup Netting Grup Setup Pay Grup Setup Netting Letter Subject Setup Netting High Level Flw Netting Agreement Setup Searching Agreements Creating Netting Agreements Business Rules and Preferences Pay Grups Payables Invice Types Receivables Transactin Types Trading Partners Letters Saving a Netting Agreement Managing Netting Settlements Searching Settlements

2 Creating a Settlement Reviewing a Settlement Netting Tlbar Netting Summary Payables Invice Details Receivables Transactin Details Mdifying a Settlement Submitting a Settlement Submit a Settlement Review Settlement Details Deleting a Settlement Reversing a Settlement Netting Reprting Netting Settlement Letter Netting Settlement Reprt Netting Settlement Listing Netting Reversal Letter Running the Netting Reversal Letter Manually ing the Netting Reversal Letter Netting Reversal Spreadsheet Appendix Discunts wrking Example Appendix Netting Grup setup Example Appendix Supplier and Custmer Merge Prcess Supplier Merge Custmer Merge

3 1. Purpse f the dcument This dcument explains the implementatin and usage guidelines f the cmplete Netting feature. In particular: Setup Netting Prcesses Defining Netting Agreements Creating and mdifying a Settlement Creating netting reprts such as Letters r Netting s t send t third parties. Actins a user can perfrm n Settlements The Netting feature enables the autmatic netting f Oracle Payables and Oracle Receivables transactins within a business enterprise. Yur Payables Manager, Receivables Manager r Netting Manager can define a netting agreement that incrprates the netting business rules and transactin criteria needed t supprt yur netting practices. The netting prcess autmatically creates the Payables payments and Receivables receipts required t clear a selected number f Payables and Receivables transactins. A typical scenari : Transactins are perfrmed between Payables and Receivables fr a single third party. Netting ffsets utstanding balances by cmparing the pen amunts in Payables and Receivables. Example: As part f an Agreement between a third party ( MyThirdParty ) and MyBusiness Plc, yu have agreed that transactins can be netted. A cash exchange fr each f thse transactins will nt ccur, but will be netted decreasing the exchanging f cash between MyBusiness Plc and MyThirdParty. Payables (AP) invices entered int MyBusiness Plc ttal 100, Receivables (AR) transactins entered int MyBusiness Plc ttal 100, The result is marking the receivables transactins as paid in full. The remaining Payables amunt f will either be disbursed t MyThirdParty r will be a future candidate fr future netting. The areas that will be cvered in this dcument are as fllws: 3

4 Access Netting functins thrugh the Payables and Receivables prducts. Access t the Netting user interfaces is prvided thrugh the Payments Wrkarea and the Accunts Receivable Wrkarea. See the Netting Agreement Setup sectin. 2. Assumptins and Prerequisites In this dcument, the fllwing entities are assumed t have already been setup : Data Security Refer t the Fusin Security tpical essay available n clud.racle.cm Gegraphies Enterprise Structure Suppliers Custmers Prcurement Business Functin Cmmn Optins fr Payables and Receivables We recmmend that the Implementatin Prject is cmplete fr yur rganizatin befre cmmencing the Feature Specific Setup. If yu require further details, refer t the Analyze and Reprt sectin f Oracle Financials Clud (Get Started) web site. Nte : the Netting Manager executes the Netting prcess fr the legal entity level. Separate netting settlements are created fr each legal entity and business. 4

5 3. Feature Specific Setup Setup Type: Mandatry Task name: Manage Users Navigatin: Navigatr > Setup and Maintenance -> Manage Users Security Assigning the Netting Rle Netting can nly be successfully cmpleted if the Netting Manager running the prcess has access t the Business units that wn the transactins, and the necessary rles required t create payments and in particular receipts. Assign the Netting Duty Rle Custmer and Supplier Balance Netting t nly thse users wh will create Netting Agreements and Netting Settlements. Thse same users must als be assigned access t the Payables and Receivables rles, and have data access t all business units that yu intend t use in the Netting prcess. 5

6 Netting Payment Methd Setup Setup Type: Mandatry Task name: Manage Payment Methds Navigatin: Navigatr > Setup and Maintenance -> Manage Payment Methds A netting payment methd can be setup t identify the payables invices that are netted. Ensure the Cde = NETTING 6

7 Netting Dcument Sequencing Setup Setup Type: Optinal Task name: Manage Dcument Sequence Categries & Manage Dcument Sequences Navigatin: Navigatr > Setup and Maintenance -> Manage Dcument Sequence Categries Manage Dcument Sequence Categries If in the Specify Ledger Optins task yu have pted t enable sequencing, then yu will need t setup a dcument sequence categry and dcument sequence as fllws: Ensure the Categry Cde = NETTING Navigatin: Navigatr > Setup and Maintenance -> Manage Dcument Sequences Manage Dcument Sequences Then assign a dcument sequence t the categry: 7

8 Netting Bank Accunt Setup Setup Type: Mandatry Task name: Manage Bank Accunts Navigatin: Navigatr > Setup and Maintenance -> Manage Bank Accunts A netting bank accunt is a fictitius accunt and must be assigned t netting agreements. T enable it, select the Netting accunt field n the Bank Accunt setup fr yur legal entity. Check the Netting accunt in the General tab n the Create Bank Accunt user interface. Fr Netting settlements that are fr multiple currencies (i.e. if yu create a settlement that Nets within each currency ), check the Multicurrency Accunt checkbx in the General Tab. 8

9 Assign the Business Units t the Bank Accunt in the Business Units Access tab. The Bank Accunt must als have access t the Business Units that yu want t include as part f yur netting prcess. Edit the Business Unit and assign the NETTING Payment Methd : 9

10 Netting Receipt Class Setup Setup Type: Mandatry Task name: Manage Receipt Classes and Methds Navigatin: Navigatr > Setup and Maintenance -> Manage Receipt Classes and Methds Oracle have seeded a receipt methd fr netting: ORA_AP/AR Netting. This is required in rder t prcess receipts that are created in a settlement. Navigate t Manage Receipt Classes and Methds in Setup and Maintenance Search fr the Receipt Methd = ORA_AP/AR Netting Assign yur Business Unit and Accunt that is setup in the Netting Bank Accunt Setup sectin in the Feature Specific Setup 10

11 Receivables System Optins Setup There are tw setup tasks in Receivables that affect the Netting prcess. T prcess the cash receipts within receivables, yu must allw the payment f unrelated transactins if yu want t net fr multiple custmers in a settlement. Additinally, yu can fine tune the types f transactins t be eligible fr netting. Further details n the transactin types filtering is explained in the Netting Agreement Setup sectin. Allw payment f unrelated transactins Setup Type: Mandatry if netting fr multiple business units Task name: Manage Receivables System Optins Navigatin: Navigatr > Setup and Maintenance -> Manage Receivables System Optins In the Cash Prcessing tab, check the Allw payment f unrelated transactins checkbx fr yur Business Units that yu want t include in the netting prcess. This will effectively link tgether the custmers defined in a netting agreement, in rder t create a single receipt that spans mre than ne custmer. The Agreement definitin ultimately cntrls which trading partners will net invices and transactins. Example: Yu have a trading partner wh is bth yur supplier and yur custmer. The custmer has 2 representatins that are defined in a single Netting Agreement ( MyThirdParty_C1 and MyThirdParty_C2 ) and yu want t cmbine the netting invices in Payables with the transactins frm bth custmers in Receivables. If yu indicate n the receivables setup that a single payment can cmbine transactins frm bth parties, then all f the transactins fr thse tw custmers will be added tgether and the result will be jintly netted against Payables invices. 11

12 Manage Transactin Type Setup Setup Type: Mandatry Task name: Manage Receivables Transactin Types Navigatin: Navigatr > Setup and Maintenance -> Manage Transactin Types Setup Transactin Types t cntrl which types f transactins in receivables t include fr netting. In sme cases, certain types f transactins may need t be excluded frm the agreement between the deplying entity and the trading partner (e.g. Credit Mems). Similarly, the Netting Agreement may nly cver the transactins related t a specific divisin r business purpse. Receivables transactins are eligible fr netting if the transactin types are assciated t the agreement. Only transactins fr transactin types that are assigned t the netting agreement are eligible t be netted. See Creating Netting Agreements sectin in Netting Agreement setup fr hw t filter the transactin types. This allws yu t exclude certain transactin types frm the netting selectin prcess. 12

13 Netting Grup Setup Setup Type: Optinal Task name: Manage Standard Lkups Navigatin: Navigatr > Setup and Maintenance -> Manage Standard Lkups Netting grups allw the Netting Manager t ptinally create settlements fr multiple agreements at the same time. Implement Netting Grups t grup tgether similar business related agreements fr settlements. Fr example, if yu want t net fr different types f trading partners r industries (in this example, retail banking, distributrs, farming trading partners r petrleum trading), enter the Netting grup that can be assciated t an agreement. This means that if yu want t net fr nly the agreements that are fr the petrleum trading partners grup, yu can signify this when creating a settlement. The netting prcess will ignre netting fr the ther agreements that aren t assigned t the petrleum netting grup. Oracle have seeded a lkup type fr this purpse : ORA_JE_NET_GROUP. Navigate t Manage Standard Lkups in Setup and Maintenance Search fr the Lkup Type = ORA_JE_NET_GROUP Add a Lkup Cde, Start Date and Meaning fr the netting grup. Add as many netting grups as yu wish, t differentiate between the netting agreement types. Only ne netting grup can be assigned t an agreement. If yu d nt assign a netting grup t yur agreements, then when yu create a settlement, all agreements will be selected, unless yu pt t select a single agreement. T implement Netting grups functinality, yu must use the ORA_JE_NET_GROUP lkup type. See Appendix Netting Grup setup Example. 13

14 Pay Grup Setup Setup Type: Optinal Task name: Manage Payables Lkups Navigatin: Navigatr > Setup and Maintenance -> Manage Payables Lkups Whilst the Netting Grups cntrl the types f agreements t settle, the Pay Grup functinality can help cntrl the types f payables transactins t select when building a netting settlement. If fr example yu knw which transactins are eligible fr netting when the transactins are entered (manually, spreadsheet imprt etc.), the payables invices can be created with a pre-defined Pay Grup that can be assigned t yur agreement. Add lkup cdes t the PAY GROUP lkup type fr this purpse. Navigate t Manage Payables Lkups in Setup and Maintenance. Search fr the PAY GROUP lkup type. Add a lkup cde fr yur Netting pay grup. The netting agreement can then cntrl the payables invices t select based n the pay grup. This is an ptinal setup task. If yu d nt use Pay Grups t filter the payables invices eligible fr netting, then the settlement prcess will select all the invices that meet the criteria, regardless f which pay grup is assigned t an invice. T default a Pay Grup fr invices fr a specific custmer, enter the Pay Grup at the supplier level. 14

15 Netting Letter Subject Setup Setup Type: Optinal Task name: Manage Standard Lkups Navigatin: Navigatr > Setup and Maintenance -> Manage Standard Lkups The Netting Letter and Netting Reversal Letter can be ptinally ed t the third party. T set the E- Mail subject text : Navigate t Manage Standard Lkups in Setup and Maintenance. Search fr the ORA_JE_NET_LETTER lkup type. Enter the subject in the Meaning field f the ORA_JE_SUBJECT lkup cde. Example f incming Netting Letter fr the third party inbx: See the Letters sectin in Netting Agreement Setup and the Netting Settlement Letter sectin in Netting Reprting fr further details. The settlement number will be appended t the Netting Subject autmatically. 15

16 4. Netting High Level Flw A summarized flw f the netting prcess is as fllws. Nte : It is als pssible t Delete a settlement after the settlement has been reviewed r mdified. As sn as a settlement has been settled, yu cannt delete it. The sectins that fllw will explain hw t : Create Agreements Create Settlements Review r mdify a Settlement Submit a Settlement Reverse a Settlement Review the Netting Letters and Reprts 16

17 5. Netting Agreement Setup Setup Type: Mandatry Task name: Manage Netting Agreements Navigatin: Navigatr > Payments -> Task List -> Manage Netting Agreements Navigatin: Navigatr > Accunts Receivable -> Task List -> Manage Netting Agreements A netting agreement cntrls hw a grup f trading partners net Payables and Receivables transactins. Yu can create a netting agreement fr each grup f trading partners that agrees t net transactins. Netting agreements include the business rules that define the types f transactins that may be selected fr netting, and which suppliers and custmers can be netted. Access the Netting Agreement user interface frm either the Payments wrk area in Payables, r the Accunts Receivable wrk area in Receivables. Click n the Task List. The Manage Netting Agreements link is under the Custmer and Supplier Balance Netting sectin. 17

18 Searching Agreements In the search windw, yu can find agreements that yu have already created. By default, the search will nly select active agreements that have nt been end dated, but yu can change this in the Active Netting Agreement field. Creating Netting Agreements When creating a new agreement, there are six main cmpnents that mdel the agreement and each cmpnent will be described in turn. 1. Business Rules and Preferences 2. Pay Grups 3. Payables Invice Types 4. Receivables Transactin Types 5. Trading Partners 6. Letters 18

19 Business Rules and Preferences The netting agreement business and rules and preferences indicate the high level details and preferences that apply t yur agreement between yurself and a trading partner. Business Rules Regin Select the Legal Entity fr the agreement. Netting is perfrmed fr the Legal Entity. If yu have multiple business units assigned t a legal entity, they will all be assessed fr netting. Nte : the Netting manager can nly net invices that he/she has access t by virtue f their business unit security. Enter an Agreement Name. Optinally enter a Trading Partner Reference frm yur third party with whm the agreement is with. Enter a Start Date fr the agreement. This shuld reflect the cntractual start date with the third party. Optinally enter an End Date fr the agreement. Settlements can nly be created fr agreements prvided the date f the settlement is within the Start Date and End Date range. Therefre, if the agreement has cme t an end between yurself and the third party, yu must end date the agreement. This will prevent further netting settlements frm taking place fr the agreement and it can n lnger be used fr prcessing netting. Netting Preferences Regin The netting preferences dictate hw yu want t manage the transactins in an agreement. Select the Netting Bank Accunt Name. Only active bank accunts that have the Netting accunt checked will be available fr selectin. See the Netting Bank Accunt Setup sectin in Feature Specific Setup. Select the Netting Order Rule. The rule indicates the pririty in which transactins will be selected fr netting. Yu will still have the pprtunity t fine tune the rdering f netting transactins nce a settlement has been selected in the ADFDi spreadsheet dwnlad. Defaults t Due date frm ldest t mst recent. Select this if yu want t clear transactins that are past r near the due date first. Ascending Amunt. Select this if yu want t clear a large number f small transactins first. Descending Amunt. Select this if yu want t clear the larger amunt transactins first. Transactin date frm ldest t mst recent. Select the Netting Balance Rule. The rule determines the cnditins when t net. If yu want t restrict the netting t nly take place when the balance f payables invices is greater than the balance f receivables transactins, then chse : Net when Payables is greater than Receivables. Otherwise, select Net Always Optinally assign a Netting Grup t yur agreement. See the Netting Grup Setup sectin in Feature Specific Setup and Appendix Netting Grup setup Example. Check the Allw early settlement discunt checkbx if yu want t ensure that eligible discunts are applied t the amunts. See Appendix Discunts wrking Example fr further details. Select the Netting Currency Rule. If yu want t settle fr invices and transactins fr a particular currency (e.g. GBP), then yu can set the netting currency rule t Use Single Currency. Yu can then select the Currency. If yu have invices in transactins fr multiple currencies, yu can select Net within each currency. Fr example if yu have GBP and EUR invices/transactins that yu want t net, a settlement will be created fr each currency (ne fr GBP and anther fr EUR). Bth settlements can then be treated independently f ne anther. Ensure the Netting Bank Accunt has the Multicurrency checkbx checked. 19

20 Pay Grups If yu want t allw all payables invices t be available fr a settlement, regardless f which pay grup is assigned t the invice, then leave this field blank. If hwever, yu have a scenari where yu want t restrict the invices fr selectin t nly thse that belng t ne r mre pay grups, then select ne r mre Pay Grups that yu wish t assign t the agreement. The settlement prcess will then nly select thse transactins that belng t the pay grup(s) that are assigned t the agreement. See the Pay Grup Setup sectin in Feature Specific Setup n hw t setup the pay grups prir t invice prcessing. Payables Invice Types Restrict the types f payables invices that are eligible fr netting by indicating which types f payables invices t be cnsidered. The three types f payables that yu can assign t the agreement are : Standard (added by default) Credit Mem Debit Mem Therefre, if yu nly want t net the standard invices and debit mems, yu can d s by just selecting thse 2 ptins frm the list f values. The settlement prcess will then nt pull the Credit Mems in payables. Payables Invice types are seeded by Oracle and cannt be changed r added t. Receivables Transactin Types Similar t the Payables Invice Type filtering, yu can further restrict the types f receivables transactins that are eligible fr netting by indicating which Receivables Transactin Types t include in netting. 20

21 In the example abve, the agreement is setup such that nly 2 f the transactin types are valid fr netting t take place. If there are ther receivables transactins that are nt assigned t either f the 2 transactin types, they will nt be selected. Receivables transactin types may be extended see the Manage Transactin Type Setup sectin in Feature Specific Setup. Trading Partners The Trading Partners tab allws yu define the suppliers and custmers that yu want t net transactins. In the example belw the agreement is between MyBusiness Plc and MyThirdParty. MyThirdParty is defined as : A supplier with 2 sites A custmer with 1 site The assciatin n the agreement will result in payables invices frm the 2 supplier sites being selected and the receivables transactins frm the single custmer site. Multiple supplier and custmer names can be jined tgether t represent the third party relatinship fr netting. 21

22 Select Supplier Regin Select ne r mre Supplier Names that represents the suppliers yu wish t net invices. The Supplier Number and Supplier Tax Registratin Number frm the supplier prfile, display fr validatin. Optinally select ne r mre Supplier Sites fr the Supplier Name. If yu want t include all supplier sites fr netting, then leave the Supplier Site field blank. If yu d select a Supplier Site, the Site Tax Registratin Number displays fr validatin purpses The netting prcess will rank the invices frm the suppliers based n the Pririty fr the Suppliers. In the example abve, the invices fr Valencia Div will be priritized ahead f thse frm My Secnd Addre. There is further pprtunity t change the invices fr selectin nce a settlement has been selected. Select Custmer Regin Select ne r mre Custmer Names that represents the custmers yu wish t net transactins. The Custmer Number and Custmer Tax Registratin Number frm the custmer prfile, display fr validatin. Optinally select ne r mre Custmer Sites fr the Custmer Name. If yu want t include all custmer sites fr netting, then leave the Custmer Site field blank. If yu d select a Custmer Site, the Site Tax Registratin Number displays fr validatin purpses The netting prcess will rank the transactins frm the custmers based n the Pririty fr the Custmers. In the example abve, there is just ne Custmer Site selected, s the pririty des nt matter. Mre cmplex relatinships may require yu t rder the pririty f the custmer and custmer sites t ensure yu net transactins frm certain custmer representatins first. Letters The Letters tab allws yu t cnfigure hw yu want the Netting Letter t be distributed t yur third party. The letter is a cnfirmatin t the third party that the invices have been netted, listing all the invices and transactins that were included in the netting amunt. 22

23 Letter Preferences When yu first create an agreement the default is t enable Generate Netting Letter. If yu d nt want letters t be generated t send t yur third party, then yu can disable this by un-checking the Generate Netting Letter checkbx. Yu can save the recrd and the Agreement setup is cmplete. If yu wish t the netting letters t the third party, enable the Send Letters by checkbx. Netting Letter Cntacts If yu have enabled the Generate Netting Letter, the letter will be sent t the Recipient Address. This is defaulted frm the Supplier Address f the highest pririty supplier site which is Primary Pay and entered n the Trading Partner tab. Yu can hwever, verride this address t any ther address fr the supplier/custmer cmbinatin that yu define in the Trading Partner tab. The address yu select will be the address that appears n the Netting Letter. Select the Language in which yu want the letter t be presented t the custmer. The value will default frm the Site Language f the supplier site that is selected in the 'Recipient Address'. If yu have enabled the Send Letters by ptin, yu must als enter the : T . Enter the address that the letter will be ed t. If the letter is fr multiple sites, the third party will have t distribute this themselves internally. Therefre, yu can nly send the letter t a single address. It is defaulted with the Primary cntact f the supplier site that is defaulted/selected in 'Recipient Address' [ is primary cntact s address]. Yu can verwrite this t a different address if required. Frm . Enter the address that will appear n the recipients Frm . This shuld be the persn r department that created the settlement. The value will default frm the Statement Delivery Using Frm frm the Receivables System Optins if it exists. Yu can verwrite this t a different address if required. Frm Name. Enter the Frm Name that will appear n the netting letter. This shuld be the persn r department that created the settlement. The value will default frm the Statement Delivery Using Frm Name n the Receivables System Optins if it exists. Yu can verwrite this t a different value if required. Optinally enter a Reply-t address that will appear n the recipients Reply t . This shuld be the persn r department address that will deal with any queries frm the third party relating t the netting settlement. The value will default frm the Statement Delivery Using Reply-t frm the Receivables System Optins if it exists. Yu can verwrite this t a different address if required. 23

24 Saving a Netting Agreement When the sectins abve have been entered, yu are ready t save the agreement. Yu can either Save and Create Anther agreement, r Save and Clse. When yu save the agreement, validatin will run n the third party entities and sites that have been entered. If the system detects that there are different Tax Registratin numbers n the third party recrds a warning will display, asking fr verificatin that yu have selected the crrect cmbinatin. This is intended t ensure yu validate yurself the crrect cmbinatin f suppliers, supplier sites, custmers and custmer sites have been selected fr netting. Once an agreement has been saved, yu can edit it at a later date. Hwever, the fllwing attributes will nt be able t be changed : Legal Entity Agreement Name Yu are nw ready t create a Netting Settlement based n the Agreement that yu have setup. 24

25 6. Managing Netting Settlements Task name : Manage Netting Settlements Navigatin : Navigatr > Payments -> Task List -> Manage Netting Settlements Navigatin : Navigatr > Receipts -> Task List -> Manage Netting Settlements This sectin will cver : Searching settlements Creating a settlement Reviewing a settlement Mdifying a settlement Submitting a settlement Deleting a settlement Reversing a settlement Searching Settlements Search n existing settlements t actin a settlement. Settlement actins can be: Delete a settlement Submit a settlement t create the netting Reverse a settlement that has already been cmpleted Dwnlad a settlement t a spreadsheet fr review and mdificatin The search functinality allws yu t find any settlement that has already been created. Use the filtering criteria f Legal Entity, Settlement Name, Settlement Number, Status r Agreement Name. The results will be rdered by the mst recently updated settlement. 25

26 Creating a Settlement T create a new settlement such as the fllwing: Chse the Legal Entity fr the first party. Only legal entities that have active agreements created fr them will be available. There are 3 methds f creating a settlement. See Appendix Netting Grup setup Example. 1. Create fr All Agreements that belng t the Legal Entity. Chse the All Agreements radi buttn if yu have multiple agreements fr yur Legal Entity and yu want t perfrm netting en masse. 2. Create fr specific Netting Grups. Chse All Agreements and select the Netting Grup if yu want t perfrm netting fr a specific grup f agreements assigned t yur Legal Entity. 3. T create fr a single agreement, chse the Specific Agreement radi buttn and then select the Netting Agreement that yu want t use fr netting. Select the Settlement Date. This relates t the date that netting will ccur. This cannt be a prir date and it defaults t tday s date. The Settlement Name will default t : Legal Entity + Agreement Optin + Tday s Date. Yu can verride the default t any ther unique value. This is intended t help yu track yur settlements by a meaningful cnventin fr yur business. If yu wish t settle a settlement withut reviewing the cntent, then select Yes in the Settle Withut Review field. Hwever, it is strngly recmmended that yu leave this set t the default f N, s that yu can internally verify and mdify the settlement details prir t creating the settlement. Select the Transactin Due Date. All transactins will be selected in the netting prcess, prvided their due dates are befre r equal t the Transactin Due Date. Therefre yu can use this t net based n when transactins shuld be due, aviding late payment charges. Select the Accunting Date. All the payments and receipts that are created will have this accunting date stamped n them. Select the Cnversin Rate Type. This is the exchange rate that will be used when calculating any freign currency transactin gains and lsses. Fr example, yur ledger currency may be in GBP, but the transactins may be in EUR. Yu can either Save and Create Anther settlement, r Save and Clse. Once yu save the recrd, yu will receive cnfirmatin that the netting prcess has started. The netting prcess will then select all eligible invices and transactins that meet the criteria n the netting settlement and the agreements t which they relate t. The netting prcess may create multiple settlement numbers depending n the fllwing: Number f Agreements yu have selected fr netting settlement run. 26

27 Number f different currencies in the settlement (a settlement is created fr each different currency f transactins) Fr example, if yu have 5 agreements and 2 f thse agreements cntain 2 different currencies f invices/transactins, yu will have 7 different settlement numbers created fr the settlement name. Each settlement will then be prcessed independently. Reviewing a Settlement Assuming yu have pted t review the settlement prir t the creatin f payments and receipts, yu can review the prpsed settlement in a spreadsheet. It is necessary t review the cntent, s that yu have cnfirmed that the crrect set f invices and transactins are being selected fr netting. This is the last chance t alter the settlement befre the netting prcess creates the payments and receipts. Click n Actins -> Dwnlad Settlement t Spreadsheet, r yu can dwnlad t excel frm the dwnlad link fr the settlement search results table fr yur settlement number. An ADFDi excel file with then be dwnladed which yu can pen t review the details f the settlement. Ensure yu have the Oracle ADF Desktp Integratin Add-In fr Excel installed. Netting Tlbar Yu can then pen the file and cnnect t the instance. In the excel ribbn, yu will see the Netting Settlement menu. If yu make changes t the settlement via the ADFDi spreadsheet prir t submitting the final settlement, yu must click the Uplad Settlement icn. 27

28 Netting Summary The summary infrmatin appears n bth tabs ( Payables and Receivables ). Fr example, the fllwing fields apply. Settlement Number that was generated during the prcess Settlement Name yu entered Agreement Name that the settlement was created fr Status f the settlement when yu dwnlad the spreadsheet (e.g. Selected, Reversed r Settled) Payables Amunt : The ttal amunt f Payables Invices fr yur suppliers are summed up Receivables Amunt : The ttal amunt f Receivables Transactins fr yur custmers are summed up Prpsed Netting Amunt : This represents the amunt that can be netted. In this example the amunt is equal t the ttal Payables Amunt, indicating that all f the Payables invices can be netted, but there will be sme receivables transactins that cannt be netted in the settlement. It is Prpsed since at this pint, n payments r receipts have been prcessed. Yu can fine tune the settlement and mdify it. This is explained in the next sectin. Payables Invice Details The Payables tab lists the invices that were selected fr Netting. Key Clumns : Changed/Exclude/Rw Status : These are indicatrs that track which rws are being remved r changed. Rank : The rder in which the final netting prcess will net the invices. The ranking can be changed in case yu want t exclude r include ther payables invices in the netting settlement. Invice Number : The invice that is selected by the prcess as a candidate t be netted. Invice Type : The payables invice type. Only invice types that yu selected in the agreement setup will be selected. 28

29 Supplier Name, Number and Site : The supplier details indicate the trading partner in Payables that the invice relates t. Invice Date : The date stamped n the invice in payables. Invice Amunt : The ttal invice amunt in payables. Open Amunt : The amunt that will be netted. Invice Currency : The invice currency n the payables invice. Settlement Currency : The currency that the invice will be settled in. Receivables Transactin Details The Receivables tab lists the transactins that were selected fr Netting. Key Clumns: Changed/Exclude/Rw Status : These are indicatrs that track which rws are being remved r changed. Rank : The rder in which the final netting prcess will net the transactins. The ranking can be changed in case yu want t exclude r include ther receivable transactins in the netting settlement. Transactin Number : The transactin that is selected by the prcess as a candidate t be netted. Transactin Type : The receivables transactin type. Only transactin types that yu selected in the agreement setup will be selected. Custmer Name, Number and Site : The custmer details indicate the trading partner in Receivables that the transactin relates t. Transactin Date : The date stamped n the invice in receivables. Transactin Amunt : The ttal invice amunt in receivables. Open Amunt : The amunt that will be netted. Transactin Currency : The transactin currency n the receivables transactin. Settlement Currency : The currency that the transactin will be settled in. 29

30 Mdifying a Settlement After review f the prpsed settlement, yu may wish t decide t : Remve sme invices r transactins frm the prpsed settlement. Duble click the Exclude cell fr the invice r transactin number. A blue dt indicates that the recrd is selected fr exclusin. Save changes Click the Uplad Settlement menu item. The Payables r Receivables Amunt will be decreased in the spreadsheet. Add ther invices r transactins int the settlement that were nt riginally selected as part f the prcess since they did nt adhere t the settlement criteria. Fr example the due date n the invice is greater than the transactin due date. Add a new rw in excel Duble click the Invice Number (if yu want t add a payables invice) r the Transactin Number (if yu want t add a receivables transactin) 30

31 Search fr the Invice Number (Payables) r Transactin Number (Receivables). Once yu have selected yur invice r transactin, it will be added int the spreadsheet. The Rw Status will change, indicating that yu have new data. Save changes Click the Uplad Settlement menu item. The rw status will indicate that the rw has been inserted successfully. The Payables r Receivables Amunt will be increased in the spreadsheet. Rerder sme invices r transactins t frce them t be netted. Fr example, yu ntice that yu have a very imprtant invice that yu want t be netted. Hwever, since the AP ttal amunt is substantially mre than the AR ttal amunt there is nt enugh AR balance t net with AP. Yu can increase the ranking f the AP invice t 1 t frce the invice t be netted. Cnfirmatin that the rw is being updated is reflected by the blue triangle in the Changed clumn fr the invice r transactin that yu have mdified. Save changes Click the Uplad Settlement menu item. At this stage, the prpsed settlement has been created, reviewed and mdified. The settlement is nw ready t be submitted fr the netting t take place. 31

32 Submitting a Settlement Submitting a settlement that is in Selected status will run the settlement prcess t create the payments and receipts. Depending n the Netting Letters setup, the netting letter may be autmatically submitted frm the netting rutine. Submit a Settlement T submit a settlement : Search fr the settlement in the Manage Netting Settlements user interface. Select the rw. Click n Actins -> Submit Settlement. A cnfirmatin will shw, indicating that the prcess has been submitted. Refresh the data in the settlement table. The settlement will change frm status Selected t Clearing. This indicates that the payments and receipts are being created in payables and receivables. When the settlement is cmplete, the settlement will change t Settled. Click n t check fr cmpletin. During the settlement prcess, the fllwing reprts are als run: Netting Reprt : Lists all f the invices and transactins with details n the amunts netted. Netting Letter : If yu have enabled the Generate Netting Letter a netting letter is prduced fr yur third party. If yu enabled the Send Letters by ptin the letter will autmatically be sent t the third party cntact. See the Letters sectin in Netting Agreement Setup. 32

33 Review Settlement Details T review the settlement details (prir t final submissin) such as : Payment Numbers Receipt Numbers Invices Netted Transactins Netted Invices nt Netted (Payables balance is greater than Receivables balance) The Netting manager shuld : Search fr the Settlement in the Manage Netting Settlements user interface. Click the Dwnlad link t dwnlad the spreadsheet. Open the spreadsheet t review the details. Cnnect t the envirnment when prmpted. Example Output (Payables Tab) : The Payment Number is shwn indicating the payment number that was stamped n the invice in payables. The ttal Netting Amunt. This is the sum f the payables invices that were successfully netted. The Netted Amunt fr each payables invice. If Payables > Receivables, sme invices will nt be netted. An invice can be partially netted. The netting manager can review these details in the spreadsheet. The Netted Amunt will be zer, r will be less than the Invice Amunt. 33

34 Payment Numbers will be blank, indicating that the invice was nt netted. The invice will be made available fr the next netting settlement, r it can be paid in payables. Netted Amunt f invices were nt netted will have zer in the Netted Amunt clumn. Partially Netted Invices can be identified as thse that have an Invice Amunt that is greater than the Netted Amunt and the Netted Amunt is nt zer. In such cases, the invice has been partially paid. Partial payments may be used in future settlements r the balance may be marked as paid in the traditinal business prcess utside f Netting. Example Output (Receivables Tab) : The Receipt Number is shwn indicating the receipt number that was stamped n the transactin in receivables. The ttal Netting Amunt. This is the sum f the receivables transactins that were successfully netted. The Netted Amunt fr each receivables transactin. 34

35 Deleting a Settlement If a settlement has been created and is in Selected r Selected n transactins status, and yu have decided that the settlement is n lnger required, yu can delete a settlement as fllws: T delete a settlement : Search fr the settlement in the Manage Netting Settlements user interface. Select the rw. Click n Actins -> Delete Settlement. A warning will shw: Deleting a settlement releases the transactins frm the settlement t be available fr future netting settlements. Click Yes t cnfirm. The settlement will n lnger be in the settlements user interface. Settlements that have already been Reversed r Settled cannt be deleted. Reversing a Settlement If a settlement has been created and is in Settled status, indicating that the payments and receipts have already been created, but yu have realized that the settlement was errneusly created, yu can Reverse a settlement as fllws: T reverse a settlement : Search fr the settlement in the Manage Netting Settlements user interface. Select the rw. Click n Actins -> Reverse Settlement. A warning will shw: Reversing a settlement will vid the payments and reverse the receipts. The invices and transactins frm the settlement will then be available nce again fr future netting settlements. Click Yes t cnfirm. A cnfirmatin will appear indicating that the prcess t reverse has been submitted. 35

36 Refresh the data in the settlement table. The settlement will change frm status Settled t Reversed. This indicates that the payments have been vided and receipts are nw reversed. A netting reversal letter is then autmatically created which can be ed r sent t the third party, indicating that the payments and receipts have been reversed. See the Netting Reversal Letter sectin in Netting Reprting. Only settlements that are Settled can be Reversed. 36

37 7. Netting Reprting Navigatin : Navigatr > Financial Reprting Center There are 4 different types f Netting Reprts : Netting Settlement Letter : If the Generate Netting Letter was selected fr the agreement, a letter will be generated each time a settlement takes place. The letter can then be sent t yur third party. Netting Settlement Reprt : A Netting reprt is autmatically generated each time yu submit a settlement. Netting Settlement Listing : This is the same as the Netting Reprt, but it is generated in xls frmat, s that yu can easily imprt the data int a spreadsheet fr data manipulatin. Netting Reversal Letter : If yu Reverse a settlement that is already settled, a Netting Reversal Letter will autmatically be generated t send t yur third party. The Netting Letter and Netting Reversal Letter can ptinally be ed direct t the third party. See the Letters sectin in Netting Agreement Setup. Access the reprt utput frm either the Financial Reprting Center. Or, access the reprt utput frm within ESS : Navigatr -> Tls -> Scheduled Prcess 37

38 Netting Settlement Letter The netting letter is autmatically run when the netting manager submits a settlement r creates a settlement withut review. Access the reprt frm the Financial Reprting Center. The letter lists : Payables Invices that were netted, shwing the : Invice Number Invice Type Invice Date Invice Amunt Netted Amunt Invice Currency Invice Ttal Netted Ttal Example : Only Payables invices that were netted are listed. Receivables Transactins that were netted, shwing the : Transactin Number Transactin Type Transactin Date Transactin Amunt Netted Amunt Transactin Currency Transactin Ttal Netted Ttal Example : 38

39 The Netting Settlement Letter can be autmatically sent via t the Third Party. See the Letters sectin in Netting Agreement Setup. 39

40 Netting Settlement Reprt The Netting Settlement Reprt is an internal reprt fr the netting manager t review. It is autmatically run when the netting manager submits a settlement r creates a settlement withut review. Access the reprt frm the Financial Reprting Center. It lists the: Netting Agreement and Netting Settlement ptins that were valid at the pint f settlement. Payables Invices Supplier Name Supplier Number Taxpayer ID Tax Registratin Number Supplier Site Invice Number Invice Date Invice Type Amunt Invice Currency Open Amunt (The pen invice amunt befre netting) 40

41 Final Netting Amunt (The amunt f the invice that was netted) Open Amunt after Netting (The final pen invice amunt after netting). In sme cases, an invice may be partially netted. The invice that was partially netted can be identified as the invice where there is a psitive Open Amunt after Netting that is less than the Open Amunt Settlement Currency Invice Amunt Ttal Open Amunt Ttal Final Netting Amunt Ttal Open Amunt after Netting Ttal Receivables Transactins Custmer Name Custmer Number Taxpayer ID Tax Registratin Number Custmer Site Transactin Number Transactin Date Transactin Type Amunt Transactin Currency Open Amunt (The pen invice amunt befre netting) Final Netting Amunt (The amunt f the invice that was netted) Open Amunt after Netting Settlement Currency Transactin Amunt Ttal Open Amunt Ttal Final Netting Amunt Ttal Open Amunt after Netting Ttal 41

42 Netting Settlement Listing The Netting Settlement Listing is an internal reprt in spreadsheet frmat, fr the netting manager t review. It is autmatically run when the netting manager submits a settlement r creates a settlement withut review. Access the reprt frm the Financial Reprting Center. It has fur sectins: Title Tab : Reprt Name Reprt Date Legal Entity Settlement Name Header Tab : Lists Netting Agreement and Netting Settlement ptins that were valid at the pint f settlement. 42

43 Payables Transactins Tab Supplier Name Supplier Number Taxpayer ID Tax Registratin Number Supplier Site Invice Number Invice Date Invice Type Amunt Invice Currency Open Amunt (The pen invice amunt befre netting) Final Netting Amunt (The amunt f the invice that was netted) Open Amunt after Netting (The final pen invice amunt after netting). In sme cases, an invice may be partially netted. The invice that was partially netted can be identified as the invice where there is a psitive Open Amunt after Netting that is less than the Open Amunt Settlement Currency Receivables Transactins Tab Custmer Name Custmer Number Taxpayer ID Tax Registratin Number Custmer Site Transactin Number Transactin Date Transactin Type Amunt Transactin Currency Open Amunt (The pen invice amunt befre netting) Final Netting Amunt (The amunt f the invice that was netted) Open Amunt after Netting Settlement Currency 43

44 Netting Reversal Letter The Netting Reversal Letter will autmatically run when the netting manager Reverses a Netting Settlement. See the Reversing a Settlement sectin in Managing Netting Settlements. Running the Netting Reversal Letter Manually Task name: Scheduled Prcesses Navigatin: Navigatr -> Scheduled Prcesses The netting manager can als schedule the reprt frm Scheduled Prcesses. Select Netting Settlement Letter as the reprt t run. Select the Legal Entity Select the Settlement Name If there are multiple settlements fr the Settlement Name, select the Settlement Number that relates t the settlement where yu want t print the Reversal Letter ing the Netting Reversal Letter If the Send Letters by ptin is selected n the Agreement, an f the reversal letter will be sent t the Third Party Cntact. Example f incming fr the Third Party cntact: 44

45 The reversal letter is attached t the . The letter is similar t the Netting Settlement Letter, but in this scenari, the letter indicates that the payments have been vided and the receipts have been reversed : 45

46 Netting Reversal Spreadsheet The netting manager can als btain the reversal details f the netting settlement by dwnlading t a spreadsheet. T dwnlad reversal details f a settlement : Search fr the settlement in the Manage Netting Settlements user interface. Select the rw. Click n Actins -> Dwnlad Settlement t Spreadsheet, r click n the Dwnlad icn. The spreadsheet will dwnlad. The Payables tab lists the vided payments. The Settlement Status is Reversed. The Netting Amunt will be zer. The Netted Amunt fr the transactins will be zer. The Receivables tab lists the receipts that have been reversed. The Settlement Status is Reversed. The Netting Amunt will be zer. The Netted Amunt fr the invices will be zer. 46

47 APPENDIX DISCOUNTS WORKING EXAMPLE The Create Netting Agreements sectin shws hw t setup an agreement that cnsiders discunts n Payables invices and Receivables transactins via the Allw early settlement discunt checkbx. Discunts frm Payables and Receivables are calculated when the settlement is submitted int Settled status. Therefre, discunts will nt be able t be calculated r viewed when the settlement is in Selected status. A discunt is cnsidered, based n the Invice and Transactin Due Dates and the Settlement Date when creating a settlement. The Settlement Date, Invice due date, Transactin due date and Allw early settlement discunt checkbx will determine if the discunt will be cnsidered. The invices and transactins that will be cnsidered fr discunts will have a due date that falls within the dates entered. 47

48 An Example : Transactins are entered with payment terms that have been defined as discunt is available if transactins are settled within the discunt perid (2/10, Net 30). i.e. a 2% discunt is applicable if it is paid within 10 days, therwise it must be paid within 30 days. 1. Payment Terms n transactins in Receivables and Payables: Payment terms 2/10, Net Payables Invice and Receivables Transactin Dates: 12 September Receivables transactin amunt: Payables invice amunt: Settlement Date: 19 September 2016 (i.e. less than 10 days frm the invice dates, s the 2% discunt applies) 48

49 6. Results: Receivables receipt amunt (300 2% f 300 = 294) Payables payment amunt (100-2% f 100 = 98) The submitted netting amunt will result in Receivables having an pen amunt fr future cash receipt availability f ( ). The results can be viewed in the Netting reprts and spreadsheet dwnlad. 49

50 APPENDIX NETTING GROUP SETUP EXAMPLE Cnsider the fllwing example setup : Netting Grups see Netting Grup Setup sectin in Feature Specific Setup. The fllwing netting grups are setup. Grup # Netting Grup 1 Netting Distributr Grup 2 Netting Farming Grup 3 Netting Petrleum Grup 4 Netting Reseller Grup 5 Netting Retail Banking Grup Netting Agreements see Business Rules and Preferences sectin in Netting Agreement Setup. The fllwing 7 netting agreements are created. Six agreements are setup with a netting grup assignment. Agreement # Agreement Name Netting Grup Assigned t Agreement 1 Derry Farms Netting Farming Grup 2 Valley Farms 3 Chiltern Farms Netting Farming Grup 4 Fur star Petrl plc Netting Petrleum Grup 5 Dynamic Diesel plc Netting Petrleum Grup 6 Easy Mney Ltd Netting Retail Banking Grup 7 Value Lans Ltd Netting Retail Banking Grup Netting Settlement Submissin Optins see Creating a Settlement sectin in Managing Netting Settlements. The fllwing 5 settlements are submitted. Different submissin ptins are as fllws. Settlement # Agreement Name Netting Agreement Netting Grup Agreement # s t Prcess fr Netting 1 All Agreements Netting Farming Grup 1, Specific Agreement Dynamic Diesel plc 5 nly 1 3 All Agreements Netting Retail Banking Grup 6,7 2 4 Specific Agreement Valley Farms 2 nly 1 5 All Agreements 1,2,3,4,5,6,7 7 # f Settlements Created 1 1 : The Settlement is submitted with a single settlement name e.g. My Settlement fr MyBusiness Plc. If ptin 5 abve is used t select all settlements, then 7 different settlement numbers will be generated and each will have t be settled individually. Cntrl which agreements yu want t create settlements fr, by selecting the ptins fr : Agreement Name ( All Agreements vs Specific Agreement ) If All Agreements is selected, ptinally filter which agreements t settle based n the Netting Grup. If n netting grup is specified, then all active agreements are selected fr the netting prcess. If Specific Agreement is selected, a single agreement will be used fr netting. 50