R12 : Setting up for AP/AR Netting

AP/AR Netting automatically compares Payables to Receivables and creates the appropriate
transaction in each system to net supplier invoices and customer invoices. With this
functionality, A receivables user can
View netted receipt details directly from the receipt
Create Netting Agreements and Netting Batches
With this functionality, there is significant increase in user productivity and effectiveness
because of tight integration and automation.
You can access the process via:
Navigation: Receipts > Netting > Netting Batch
Navigation: Receipts > Netting > Netting Agreement
Receipts > Receipts > Action Menu : AP/AR Netting
After Querying a netted receipt, the user can see more details about the batch by
selecting AP/AR Netting from the Action menu. This launches the AP/AR Netting
batch window. Netted Receipts are created automatically by the AP/AR Netting
process and cannot be updated by the user from the Receipts Workbench
As we have seen Contra charging has been replaced by AP/AR Netting, lets take a setup walk
though to use this functionality.
1.Define netting control account
Setup>Financials>Flex field>key>values
2.Create bank
Setup>payment>Bank and Bank Branches
You should note ,Payment document is not required for netting bank account.
3.Go to receivables responsibility, receipt class definition form
Setup>Receipts>Receipt class
Query the 'AP/AR Netting' receipt class which is a seeded one.

4. Attach your bank account in this receipt class.
5.Go to system options, transaction and customer tabbed region, there enable 'Allow
payment of Unrelated Transactions'check box

6. Create netting agreement
Receipts>Netting>Netting Agreement

7. Enter an Invoice in Payables, validate and run create accounting.
8. Enter a transaction in receivables.
9. Create Netting Batch
Receipts >Netting >Netting Batch

10. Query your netting batch and see the status as Complete. also click on view report icon
on right side.click on run push button, you can see the final netting report.
11.Go to view>request>find
You can see 3 concurrent request programs
Create Netting batch
Settle netting batch
Netting Data Extract
12.Now go to receipts and query the AP/AR netting receipt.
13.Now Go to Tools >view Accounting, you can see Netting control account (defined in first
step a) debited and receivable account credited.
14. Now go to payables and query your invoice number and click the tab view payments.
You can see the payment details and copy the document number.
15.Query your copied payment document number.What you can see the payment type as
Netting .
16.Click actions button and enable the check box create accounting .
17.Go to tools>view accounting .You can see the accounting entry