Netting Processing

The netting process calculates the net amount of the invoices included in the netting scope for one cycle.

The payment amount is based on the net results for each participant and potential third party.

Here are the elements required for successful netting processing:

• Cycles
• Scope: selection of the invoices to be processed
• Calculation methods: rates to be used, mark-up, fees and pending invoices

Once you set up those three elements, you can simulate the netting results for a cycle.

They are transmitted to the participants via the netting center before the end of the corresponding cycle. This notification enables the participants to check the resulting data and invoices.

After this verification and the approval, the center can proceed with the final simulation.

When the center approves the final validation phase, then the cycle is definitively terminated and the cycle cannot be altered in any way.

The netting processing output also specifies the net position of each participant for the cycle. They can be notified of this result through the module.

The netting process involves two types of conversion:

• Conversion from the invoice currency into the netting currency
• Conversion from the netting currency into the invoice currency

Firstly, all the invoices to pay and to collect expressed in the invoicing currency are converted into the netting currency: the net result is automatically calculated in the netting currency with a clear difference between the net amounts to pay and the net amounts to collect.

Then, the net result expressed in the netting currency is converted into the payment currency.