Oracle AR/AP NETTING

Cash Management setup prerequisites

1. Create a netting bank account
2. Define the bank account at the legal entity level
3. Define the netting control account i.e., cash and cash clearing accounts at bank account level.

Receivables setup prerequisites

1. Create a receipt class with creation method AR/AP Netting and assign the created bank account at receipt class. Usually we use seeded Netting bank account at agreement place
2. Enable the Allow Payment of Unrelated Transactions Receivables System Option.

Steps

1. Post an invoice in account receivables
2. Post an invoice in account payables
3. Create Netting agreement
4. Create Netting batch

1. Post an invoice in account receivables:

Post an invoice in AR module.

2. Post an invoice in account payables :

Navigation:  Invoices < Entry < Invoices

Save

Again Click on Actions …1 and Create Accounting/ final post

3. Create Netting agreement

Navigation: Receipts < AP AR Netting < Netting Agreement

4. Create Netting Batch

Navigation: Receipts < AP AR Netting < Netting Batch

Query with the Netting Batch name in the netting batch field if it shows the error than click on update and add transactions which are not picked .

Than select RECALCULATE and SUBMIT

Note: We cannot update netted receipts in the Receipts workbench

We can reverse the netting batch through Action after Netting in Netting batch

Error may case

• Enter the netting agreement date before the entries to be netted.
• Enter the same cash account and cash clearing account for payables and receivables while creating the bank account.
• And also enter the same cash account at receipt class.