Automated Offsetting of Receivables and Payables
Does your company manufacture and sell products across different locations? In that case, hopefully the manufacturer—as the recipient of the receivable—no longer sends invoices to the sales company, right?
Receivables and payables within your own company can be offset multilaterally using Trinity TMS via a netting center. This can be done fully automatically on a daily basis as part of intercompany clearing or periodically at freely definable intervals as so-called “cut-off date” netting.
To ensure maximum efficiency, in most cases only one side (typically the invoice from the receivables holder) is uploaded to the system, and the liability is automatically generated. With Trinity TMS, this works even if the information required for netting must be retrieved from different ERP systems.
Alternatively, both parties can, of course, upload or enter their receivables and payables and have the system match the data. However, if this results in discrepancies, it unnecessarily slows down the entire process.
Before each netting run, it is possible to inform the relevant parties about the expected cash flows, which is particularly useful for periodic settlements. If one of the parties then discovers an error, they can comment on it via Dispute Management and file an objection. Subsequently, the complaint can be resolved, or the relevant item can be excluded from the netting run until the matter is clarified.
Since periodic netting usually involves artificial value dates (value date = settlement date), parties may become dissatisfied with payments that are made too late or too early. This issue is eliminated with immediate settlement as part of continuous intercompany clearing. It goes without saying that in this case, the option to file an objection must be waived.
You can configure whether the netting run results in an actual payment or whether the transactions are merely recorded in internal accounts within Trinity TMS. Additional cost savings may result from the fact that Trinity TMS can post the transactions resulting from netting and transmit them to the respective accounting system for automatic posting. Upon request, MT940 statements can also be generated for the transactions on the internal clearing accounts.
Provided that appropriate exchange rates are available in TMS as a basis for conversion, multicurrency netting can also be implemented. Before implementing this, however, you should carefully assess the cost-benefit ratio of the process to ensure its economic viability.
That said, there are also cases where internal receivables netting does not make sense or is not legally permissible due to national regulations. Nevertheless, it is still worth taking a closer look at potential cost savings that may have gone unnoticed until now.
To this end, Trinity has been offering customized “private cloud” installations in German data centers for years, to relieve the burden on customers’ IT resources while complying with EU data protection directives and the GDPR.
Trinity TMS is developed and maintained in Germany with a wealth of expertise. Customer inquiries are handled directly by Trinity, fostering a personal relationship between our employees and users. The German team is supported by a project office in the Netherlands, as Trinity’s client base now includes many companies based in both Eastern and Western Europe.
Trinity has demonstrated consistency for 25 years, and this will continue into the future. Tailored to each customer, experienced, fast, and personal.
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