A business enterprise that is both a customer and a supplier to the deploying company is called a trading partner. The AP/AR Netting process lets the deploying company offset their Payables and Receivables transactions against the same trading partner.
Oracle AP/AR Netting allows you to net your Payable invoice balances against your Receivables invoice balances for those Customers who are also your Suppliers.
For example, If you have a customer who is also your supplier, then rather than him paying you and then you paying him, AP/AR netting allows you to pay the net difference between how much you owe the supplier and how much he owes you.
After establishing a netting agreement with such trading partners, you set up the agreement and the rules associated with it in eBusiness Suite and you can then start to net AP and AR transactions.
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.AP/AR Netting automatically compares Payables to Receivables and creates the appropriate transaction in each system to net supplier invoices and customer invoices. The netting process runs against the specified trading partners and transaction dates, and produces these results:
If Receivables has a larger outstanding balance than Payables, then the final netting amount is the sum of the Payables open selected transactions.
If Payables has a larger outstanding balance than Receivables, then the final netting amount is the sum of the Receivables open selected transactions. If there is no outstanding balance in Payables or Receivables, the netting process applies the receipts and closes the invoices to avoid the invoices becoming overdue. The netting process creates a Payables payment and a Receivables receipt to offset the Payables and Receivables balances due to netting. One Receivables receipt is created to total the final netting amount. Once the receipt is created for netting, it cannot be unapplied.
A report that can help users to individuate business partners that are both customer than supplier.
in 11i as " supplier customer netting report" but in R12 not enabled so you must have to find it through system admin and enable it. See note[811395.1] on Oracle my support for further help.