Wednesday, 16 November 2016

AP/AR Netting for different currencies

We are aware of AP/AR Netting for common currency means where invoices in AP and Transactions in AR booked in same currencies. But here i am discussing about AP invoices are booked in KES (Currency) because we pay in our functional currency to the supplier and AR Transactions are booked in USD or KES (Currency) where we receive from customer functional currency. For this scenario we have to perform AP/AR Netting.
Pre-Requisites Steps for performing AP/AR Netting
1. Netting Bank to be defined
2. Document sequence to be defined for Netting Payments, Payment Request, AP/AR Netting categories.
3. Supplier to be defined and some Open AP Invoices 
4. Customer to be defined with some open AR Transactions
Defining Netting Agreement
While Defining Netting Agreement, Select Netting Currency Rule as "Convert to Accounting Currency".  By selecting this option multi currency netting is enabled.
After defining the Netting Agreement. Define Netting batch using Netting Agreement. By executing the Netting Batch. Netting Batch picks open invoices and transactions of all currencies available.Please find the below screen shot of AR Transaction picked for Netting where Transaction currencies are USD & KES.

Below are Payable Invoices selected for Netting where currency is KES.

By clicking on submit. Netting batch is submitted and Multi - Currency netting is performed.

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