Intercompany netting: reduce internal payments and improve liquidity control

Nomentia Intercompany Netting brings data collection, entity confirmation, dispute management, calculation, FX handling and settlement into one controlled process. In suitable group structures, netting can reduce the number of intercompany payments by around 80–90%, while also reducing unnecessary FX transactions and giving treasury a clearer view of what still needs to move at each stage of the cycle.

Collect invoices and intercompany transactions from ERP systems

The process starts with the underlying invoices and intercompany transactions. Data can be collected through API or file-based integration, with ERP-specific connectivity available for environments such as SAP S/4HANA, Oracle and Microsoft Dynamics. Additional transactions can also be entered manually when required.

This allows treasury to manage one netting cycle even when participating entities use different source systems. Nomentia is bank-agnostic, so the netting process does not depend on a particular banking relationship or settlement bank.

Participants are defined together with the settlement currency, upload deadline, confirmation deadline and settlement date. Recurring cycles can be reused as templates, and multi-tier group structures can include regional subcenters where local coordination is needed.

Confirm transactions and resolve disputes before settlement

Entity confirmation is a core part of the netting cycle because the calculation is only reliable when participants agree on the transactions being settled.

Draft netting statements can be distributed to the relevant entity users so they can review their invoices and intercompany positions before the cycle is closed. Individual line items can be confirmed or disputed instead of forcing treasury to resolve discrepancies through email outside the system.

Nomentia supports a structured dispute workflow with a seven-status lifecycle and three-tier escalation. This gives treasury a controlled way to follow open discrepancies, identify where action is required and make sure unresolved items do not disappear into parallel communication channels.

Once issues have been resolved, the calculation can be rerun and the entity can confirm its final position.

Calculate bilateral, multilateral and regulated settlement positions

Nomentia Intercompany Netting supports bilateral netting between entity pairs and multilateral netting across the participants in a cycle. The calculation shows gross and net positions, residual exposures and the settlement amounts that remain after eligible transactions have been offset.

Treasury can preview the calculation before finalisation to identify large payers and receivers, unusual positions or missing data while there is still time to act.

The process can also accommodate gross and virtual netting structures. This is particularly relevant when local regulation limits the ability of an entity to participate in standard net settlement. Regulated entities can remain part of the wider cycle while using an appropriate gross settlement method where required.

The result is a more useful view than a list of individual invoices: treasury sees which amounts actually need to move and which internal payment activity can be avoided.

Handle multi-currency netting with a consistent FX basis

Multi-currency netting is supported, but the FX treatment is deliberately consistent rather than selected ad hoc at calculation time.

When an invoice is uploaded, Nomentia applies the previous day's closing FX rate to that invoice. The conversion basis is therefore attached to the transaction when it enters the cycle instead of being chosen later during the netting calculation.

After opposing flows have been offset, treasury can focus on the remaining net FX exposure rather than every gross bilateral flow. That can reduce the number of internal currency conversions and the operational work associated with them.

Settle through an in-house bank or external banks

Confirmation and calculation are only useful if the resulting positions can move cleanly into settlement.

Confirmed settlement instructions can be routed through Nomentia's In-House Banking capabilities or through the external banking setup, depending on the group's operating model. Standard payment approval controls continue to apply before execution.

For entities that cannot participate in ordinary net settlement because of local regulation, gross settlement can be retained while the rest of the group continues to benefit from the broader netting cycle.

The combination of intercompany netting and in-house banking on the same platform is particularly useful because treasury can move from the calculation of internal positions to settlement without creating a separate process or control model in between.

Give participants clear netting statements and booking outputs

Participants interact with the cycle through netting statements rather than through the calculation logic itself.

Nomentia can provide draft and final statements per entity, giving local finance teams a clear record of the transactions included, the confirmed position and the amount to be settled. The final output can also support downstream accounting processes, including generation of SAP booking files.

This reduces the need to recreate local evidence manually and gives each participating entity a consistent document for review, confirmation and posting.

Reflect the settled result in liquidity and forecasting

Intercompany settlement affects the wider financial picture. Once positions have been settled, the result can feed into liquidity and cash positioning so treasury can see the effect of the cycle in its current view.

The settlement outcome can also inform forecasting. This keeps intercompany netting connected to liquidity planning instead of leaving treasury to transfer the cash impact manually into a separate planning file.

Measure the gross-to-net effect and keep the full cycle auditable

The module keeps the history of data collection, calculations, confirmations, disputes, statements and settlements. Treasury can therefore trace how a cycle moved from uploaded transactions to the final settlement result.

Reporting can compare gross and net payment volumes and show estimated FX savings over individual cycles and over time. In suitable group structures, reducing payment volumes by around 80–90% can materially reduce bank fees, FX activity and operational handling, although the actual benefit depends on the number of participants, transaction patterns and local settlement constraints.

This gives treasury both operational evidence and a management view of the value created by the process: what happened in the cycle, how the result was reached and how much internal payment activity was avoided.

Keep ERP, treasury, in-house banking and payments connected

Nomentia Intercompany Netting is a settlement layer, not a replacement for ERP intercompany reconciliation.

ERP systems remain the source of invoices, intercompany transactions and accounting data. Treasury controls the netting cycle, confirmation process and resulting positions. In-House Banking or external payment processes execute settlement under the group's existing controls.

Connecting those roles is what turns intercompany netting from a calculation into an end-to-end treasury workflow.

See Nomentia Intercompany Netting in your own treasury setup

If you want to see how Nomentia can connect intercompany data collection, dispute handling, netting,In-House Banking and settlement across your group, contact Nomentia or book a demo.