Intercompany AR-AP Netting

I am afraid your problem is not clear. If we have two companies trading with each other, AP in one company is AR in the other company. But if they belong to the same group, these open items can be eliminated on consolidated level only - in parent company view.

For individual company, AR is open when it is paid or credited otherwise. You simply cannot close it with AP of other company - remittance of cash or credit note is mandatory. 

Hi Adam,

Nice to see your message . Yes, it should ideally be eliminated at the parent company. But, over a period of time, the balances keep accumulating and the payments have to made to clear it.

I was exploring if there is a better approach to this - like using a multilateral netting solution in a different tool or may be doing the same in IFS.

Thanks, 

Sree

skgurram - 

 

Have you tried using the mixed payment option?  

 

As Adam referenced, the system needs to process the AR/AP transactions as with outside customer/suppliers but there are methods to simplify.

 

Regards,

Christy

Hi Christy,

This looks a very nice and promising approach .  Thank you for suggesting it.

After giving a try I get the below error and it looks unusual. Would you know what I am missing?

Thanks,

Sree

Hi, Sree,

I am afraid without cash transfer these balances cannot be finally closed. The best practice is to treat intercompany supplier as external one - and pay its invoices :)

Using intercompany payment function in parent company you can close open items in AP and AR in children - but this function will only replace them with balance on parent company assets/liabilities account (indicated by PP22/PP23 posting type). I do not think moving this from place to place in balance sheet changes much. 
 

Sree - 

It is asking for a voucher type.  This example is a customer payment.

Thank you!

Thanks, Adam. That makes complete sense and helps!!

Sree - 

 

It is asking for a voucher type.  This example is a customer payment.

 

 

Thank you!

 

Thanks, Christy. Looks the issue was in code to fetch this voucher type :).