What is financials-based netting in SAP IS-OIL-DS-EXG - Exchanges?

SAP Term: financials-based netting

• Component: IS-OIL-DS-EXG

• Component Name: Exchanges

• Description: In , there are two types of netting: movement-based netting and financials-based netting. Financials-based netting is a method used in the system to net put together exchange-related payables and receivables with respect to the exchange partner. It is not based on product movements.

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• Key Concepts: 
  Financials-based netting is a process used in the IS-OIL-DS-EXG Exchanges component of SAP software. It is a way to reduce the number of payments that need to be made between two parties by combining multiple payments into one. This process is based on the financials of the two parties, such as their credit ratings and payment histories. 
  
  How to use it: 
  In order to use financials-based netting, both parties must agree to the terms of the process. The two parties will then provide their financial information, such as credit ratings and payment histories, to SAP. SAP will then analyze this information and determine if financials-based netting is an appropriate solution for the two parties. If it is, SAP will create a single payment that combines all of the individual payments between the two parties. 
  
  Tips & Tricks: 
  When using financials-based netting, it is important to ensure that all of the financial information provided is accurate and up-to-date. This will help ensure that SAP can accurately analyze the data and determine if financials-based netting is an appropriate solution for the two parties. 
  
  Related Information: 
  Financials-based netting is just one of many processes available in the IS-OIL-DS-EXG Exchanges component of SAP software. Other processes include direct debit, electronic funds transfer, and more.