Concept: Accounting and Netting Transactions

Netting transactions enable you to net the amount payable and amount receivable on supplier and customer invoices and adjustments. Workday generates accounting for the transaction amount and creates reversals of accounts payables and accounts receivables.

We display a simultaneous summary at the header while you create the transaction:

Field	Description
Net Payable and Net Receivable	The difference between the Total Payable and Total Receivable amounts.
Total Payable	The total amount to net from supplier invoices.
Total Receivable	The total amount to net on customer invoices.
Transaction Amount	The netting transaction amount, that displays as total debits/credits in the journal entry.

When a netting transaction is in progress or in draft status:

We record the netting rule and invoice eligibility rule applicable when you submit or save for later.

You can't select the invoices on a settlement run. You can settle the remaining balance on the invoices after approving the netting transaction.

When you submit or save for later a netting transaction, we lock down the selected invoices to prevent them from being available:

For another netting transaction.

For a settlement run.

To cancel or change.

When you approve a netting transaction:

We mark the supplier or customer invoice or invoice adjustment as paid or partially paid accordingly.

We generate accounting for the transaction amount and create reversals of accounts payables and receivables ledgers of the supplier and customer invoices respectively.

Where the exchange rate differs from the exchange rate for the invoice (at creation), the difference creates a realized exchange gain or loss journal entry.

We populate and display the

Accounting Date

on the

View Accounting for Netting Transaction

report.

In tenants with balancing worktags configured, we generate the corresponding accounting entries. You can specify the balancing worktag in the netting rule. Workday creates due to and due from entries for the balancing worktags in the netting transaction journal.

We don’t display the Adjust Accounting related action on supplier invoice documents included in a netting transaction that is fully or partially paid.

When you cancel a netting transaction, we:

Revert the payment status on the supplier and customer invoice documents.

Reverse the accounting entries on the same ledger period as long as the period is open. If the ledger period closed, we reverse the accounting entries in the next open period.

Populate and display the

Cancel Accounting Date

on the

View Netting Transaction

report.

Release the supplier or customer invoices and invoice adjustments selected. You can then include the invoices in another netting transaction or settlement run.

We hide suppliers with Segmented Security configured. However, you can select the netting rule related to the supplier or search for the invoices, and create a netting transaction.

Intercompany Multicurrency Netting

You can use a direct intercompany netting process to pay invoices in multiple currencies between companies within your organization.

You can set up direct intercompany netting rules between 2 or more companies using the

Maintain Netting Rules

task. A rule defines which companies can net invoices against each other. You can initiate netting between specific company pairs or for all company combinations in a combined rule. Workday enables you to select a reference currency to compare the invoices.

To manage multicurrency netting transactions, you can create direct intercompany netting transaction groups. Workday calculates the total invoice amount in the reference currency to determine the available transaction amount for netting. When you submit a group, Workday creates a netting transaction for both the initiating and the netting company, using the invoices you selected. This process ensures there are no mismatches between what is paid and what remains unpaid.

Workday generates separate operational transactions for each company within the group. While you can't edit or cancel individual transactions, you can update or cancel the entire transaction group. Canceling the group automatically cancels both transactions.

You can process direct intercompany netting runs for active rules or all rules at once. A netting run creates multiple transaction groups simultaneously. After the run is complete, you can review which groups were successfully created and which ones weren't.

Setup Considerations: Invoice Netting