Questions on Netting

[Former Member]

Dear Gurus,

I have questions on Netting:

(1) As far as I understand, all receipts with respect to PO and all delivery with respect to SO are netted by the Netting document. For financial based netting, since Netting document is doing the netting, do we still need to create billing (VF01) and vendor invoice (MIRO)? If yes, why as the Netting doc is netting it based on the GR and GI ? OR the netting is actually based on the billing and invoice created?

(2) What is the usage of Netting cycle? Why need it?

(3) Netting consists of two areas: (please elaborate further)

Posting payables or receivables

--> in this case, the payables and receivables are not offset, why need to create Netting doc?

(ii) Offsetting payables and receivables

--> in this case, payables and receivables are offset with the Netting document.

http://help.sap.com/saphelp_rc10/helpdata/en/70/23c64c419311d2ac100000e829fbfe/frameset.htm

Please help. Thank you.

Regards,

WL

[former_member635230 · Accepted solution]

Netting is based on postings to the Payable and Receivable accounts of your partners.  So you have to create billing doc for the sales and invoice verifications for the purchases.

Exchange netting is setteld through the netting process. The purpose of the netting cycle is to block payments and receipts against induvidual AR and AP postings

SAP gives you two methods for netting:

1. Financial Based Netting - Netting will be based on all AP and AR posting to the exchange partners

2. Movement Based Netting - This will use the movements and only net based only the correspond FI postings (AR and AP). It will list out movements without Financial Postings and Pure financila adjustments separately

Thanks

Srini