Glossary

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Information Only Flows

Transactions a company wants to include in the netting for visibility, discussion or agreement and reconciliation but not include these transactions in the multilateral netting results. In the case of transactions a company wants to settle these could be included in the Excluded module of Coprocess Multilateral Netting (see Excluded) or in the Coprocess Month End Reconciliation module (see Coprocess Reconciliation)

Inhouse Bank

Usually using some technology to provide payment services, liquidity management and collections functions to subsidiaries of multinationals.

Input Cut-off

This is the date by which all transactions must be uploaded to the system. See Netting Calendar.

Intercompany Accounting

See Reconciliation.

Intercompany Agreement

In simple form it outlines the obligations of each of the subsidiary companies with respect to the Netting Centre. This might include the calendar to follow, transaction types, locations, currencies etc. It can also help to make netting permissable in certain countries where it is not otherwise possible. For example it can overcome the problems associated with Payments On Behalf Of (POBO).

Intercompany Clearing

See Multilateral Netting.

Intercompany Netting

Intercompany netting allows offsetting of accounts receivable and accounts payable between two business entities, so that payment is only made for the net difference between their receivables and payables. Intercompany netting is especially useful for international payments, since it reduces the risk of changes in foreign currency exchange rates. (see also Multilateral Netting)

Interfacing

The Netting Centre is typically run by Treasury and has to interface to various systems such as the Enterprise Resource Planning (ERP) system, Treasury Management System (TMS), FX rate information systems, electronic banking systems, SWIFT service bureau etc interfaces can be established in either direction export or import.

Invoice

A document that is issued by a seller to the buyer. An invoice indicates the quantities and costs of the goods sold or services rendered. An invoice should have a unique coding or numbering process to allow easier reconciliation.