Intercompany netting with every dispute explained before the cut-off
18 payments instead of 146, with every dispute explained before the cut-off.
See one case, screen by screen ↓Intercompany netting replaces the payments group entities would make to each other invoice by invoice with one payment in or out per entity through a netting centre, and one FX trade per currency. Intercompany Netting adds seven agents that read every intercompany invoice, pair both sides, explain each dispute from the documents, calculate and independently check the positions, and draft the settlement — while entities confirm and the group treasurer approves.
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Group entities invoice each other all month — goods, engineering and management services, licence royalties. Settled one by one, every invoice becomes a cross-border payment and often a currency conversion, each with a bank fee and an FX spread. Multilateral netting fixes that with one payment in or out per entity through the netting centre, and one FX trade per currency. But it only works if both sides agree what is owed by the cut-off.
In practice the payable and the receivable disagree: a credit note sitting unbooked in a payables inbox, a short receipt, an invoice at an old markup, a rate difference, a duplicate, an upload after the cut-off. Treasury finds out that a pair differs, not why, and chases it by email while the cycle clock runs. The run waits on the last entity to confirm, and an unbooked credit note leaves two sets of books apart at month-end even when the agreed amount settles.
Estimated split of treasury and accounting effort for one monthly cycle across 18 entities, by hand and with the solution.
Seven agents read, match, explain and net every intercompany invoice and check each other; the group treasurer approves.
Kestrel & Vane Group nets intercompany invoices between 18 entities every month through its netting centre in Amsterdam. It is Thursday 15 October, 09:10 CET. Disputes and confirmations close at 12:00; the value date is Tuesday 20 October. Here is the cycle, screen by screen, in the working solution.
Her Today screen opens with what the agents did overnight: 414 invoices read from 18 entities, 405 of the 412 in the run matched, 3 of 7 disputes resolved with the entities and 2 carried to November. $86.0M is owed between entities; after netting it is 18 payments. 17 of 18 positions are confirmed — Mexico is waiting on dispute D-01.
Needs you: “Mexico has not booked a $230,000 credit note from the UK.” · Cut-off 12:00 CET · 2 h 50 min
Rows pay, columns receive: what each of the 18 entities owes another this cycle, in thousands of US dollars at the 09:00 indicative rates, with open disputes flagged. Beside it, one bar per entity — MX01 pays the centre $1,285K, US01 receives $1,862K. Above it, the three numbers that matter: $86.0M becomes $9.4M, 146 payments become 18, 132 currency conversions become 12 FX trades.
Check agent: “I rebuilt the run from both ledgers of every pair without seeing the netting agent's figures. It agrees to the cent for 18 of 18 entities.”
She asks in plain words, and the netting agent answers with its sources: the agreed $1,406,960 still settles and the $230,000 difference moves to November. Mexico would pay the same $1,284,600, because the agreed amount is the UK's figure — but its books would stay $230,000 apart from the UK's at month-end, and MX01 is escalated to its CFO and to her.
Every answer carries numbered citations that open the policy clause, ledger line or rate behind it.
“What if D-01 is excluded from October?” The netting agent recalculates the matrix and the positions live: the whole MX01 → UK01 pair moves to November, Mexico would receive $122,360 instead of paying $1,284,600, and the UK would pay $1,088,360 instead of receiving $318,600. One click goes back to the agreed figures.
“Nothing changes until a person decides.”
UK01's receivable from MX01 is $1,406,960; MX01's payable is $1,636,960. Five invoices agree on both sides. The sixth line is credit note UK01-CN-26-0418 for commissioning milestone 3 — booked in the UK, not booked in Mexico. The dispute agent says the UK is right, with confidence 0.97, and has drafted a request to Carmen Ruiz, Mexico's finance controller, for Isabel to edit or send.
“The fix belongs in Mexico's ledger, not in the netting.”
Each citation opens the passage it came from. Service agreement IC-AGR-022 §6.3: a commissioning milestone missed by more than 14 days earns a credit of 15% of the fees for that phase. Line 4's phase fee is $1,533,333.33; 15% is exactly $230,000 — GBP 172,258.84 on the credit note, which reached Mexico's payables inbox on 30 Sep at 16:12 and was never processed.
“…the Provider shall issue a credit of 15% of the fees for that phase, by credit note, within 30 days.”
Isabel sends the request by portal and email. At 09:31 Carmen replies, books the credit note as journal MX-AP-2026-118204 (MXN 4,218,635.36) and confirms Mexico's position. The matching agent re-matches the pair — both ledgers now show $1,406,960 — and the check agent recalculates: positions unchanged, agrees to the cent, 18 of 18 entities confirmed.
Carmen Ruiz: “Found it, it was in the inbox with no owner. Booked as MX-AP-2026-118204 and I confirmed our position. Gracias.”
Ravi Menon prepared and submitted the run at 09:06; Isabel approves it — four eyes. The approval states what she signs: 18 payments of $9.4M net of $86.0M gross, 12 FX trades of $4.81M, including the MXN trade of $1,284,600, which is above the $1,000,000 single-trade limit and so part of her approval. She picks R2 · Approve with carried items, since $184,980 moves to November, and signs.
“I approve the October run as Isabel Moreno, Group Treasurer — e-signature, Thu 15 Oct 2026, 09:36”
With the run approved, the settlement agent schedules 12 FX trades for the Friday 10:00 CET fixing and drafts 18 payments for Tuesday 20 October, 19 journals and 2 regulatory reports: Germany's foreign payments report and South Africa's balance-of-payments codes. Ravi Menon executes the trades on the best of three quotes and releases the payments with the bank token.
Twelve entities pay the netting centre $4.70M and the centre pays six $4.70M. Every account is checked against the master record; CZ01's changed bank details were verified by call-back on 5 Oct. Release needs two people and the bank token: Ravi releases, a colleague in treasury operations confirms in the bank portal.
The agents never hold bank tokens and never release a payment or a trade.
The same October cycle, seen by four of the people who carry it — what the week before value date looked like, and what it looks like now.
Seven agents read, match, explain and net every intercompany invoice and check each other; the group treasurer approves.
Reads intercompany invoices from four ledgers, the entity portal and emailed PDFs, and checks seller, buyer, amount, currency, tax fields and which cycle each one belongs to.
Pairs each payable with the other side's receivable and proposes reference fixes, with the evidence, when the two entities used different references.
Finds the cause of each difference in the documents — ledgers, credit notes, agreements, receipts, proofs of delivery, the payables inbox — says which side is right, and drafts the fix and the request for the entity that must make it.
Calculates each entity's net position and the FX plan — one trade per currency — and shows what an option would do to the run before anyone decides.
Recalculates the whole run from both ledgers of every pair, with its own extract and its own calculation.
After approval drafts the payments, FX tickets, settlement journals and regulatory reports, and checks every bank account against the master record.
Keeps the netting calendar, sends reminders and escalations before each cut-off, writes the morning briefing and drafts the monthly note to the CFO.
Approves every run; entities confirm their positions; treasury sends every request. The agents propose; a named person decides.
Ask about the cycle, a dispute, an entity or the run — or tell the agents what to do. Each answer comes from the agent that owns the question, with its sources and the next step.
What is left before I can approve the run?
One thing: Mexico must book credit note UK01-CN-26-0418 and confirm its position. Everything else is confirmed and the check agent agrees. The request to Carmen Ruiz is drafted and waits for you.
What happens if Mexico misses the 12:00 cut-off?
The agreed $1,406,960 still settles and the $230,000 difference moves to November. Mexico would pay the same $1,284,600, because the agreed amount is the UK's figure; but its books would stay $230,000 apart from the UK's at month-end, and MX01 is escalated to its CFO and to you.
How much does netting save us this month?
Settled gross, the 412 invoices would mean 146 cross-border payments and 132 currency conversions worth $77.4M. Netted: 18 payments and 12 trades worth $4.8M. At $32 a payment and an 8 basis-point spread, that is an estimated $62,136 this cycle, about $0.75M a year.
Why is the MXN trade above the limit?
Mexico is the largest net payer: it pays $1,284,600 in pesos, and no other entity uses pesos, so the centre sells all of it. Policy puts single trades above $1,000,000 with you; approving the run approves that trade.
13 screens from the working solution, on its sample data. Pick one to see it large.
The cut-offs, tolerances and limits every cycle runs on are the netting policy's own settings. Only the group treasurer changes them: a change needs a reason code and starts a new policy version, applied from the next cycle.
| Setting | Default | Choose from |
|---|---|---|
| Invoice cut-off | Five business days before the dispute cut-off, 17:00 CET | Set in the netting policy; later uploads move to the next cycle |
| Dispute and confirmation cut-off | Three business days before the rate fixing, 12:00 CET | Set in the netting policy; after it the agreed amount settles |
| Tolerance | $5,000 or 0.5% of the pair, whichever is lower | Differences inside it settle at the invoice amounts |
| Reference fixes applied by the agents | Confidence 0.95 or more, both entities told | Below the threshold, a person decides |
| Single FX trade needing the group treasurer | $1,000,000 | Trades above it are part of her approval |
| Rate move that returns the run for approval | 2% on any entity's payment | Checked at the rate fixing |
| Estimate inputs for reports | Spread 8 bp · $32 per cross-border payment | Your own bank tariff and spread |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample data · “target” = the design goal, measured in the live solution · “estimated” = our estimate · “typical” = published figures (Zanders, intercompany netting case study, 2021 — about 14% of intercompany inflows auto-matched before a configuration fix). People, companies, entities, banks, invoices and amounts named on this page are fictional — Kestrel & Vane Group and its people are characters and sample data in the working solution.
Intercompany netting replaces the payments group entities would make to each other invoice by invoice with one payment in or out per entity through a netting centre, and one FX trade per currency. Intercompany Netting adds seven agents that read every intercompany invoice, pair both sides, explain each dispute from the documents, calculate and independently check the positions, and draft the settlement — while entities confirm and the group treasurer approves.
When a payable and its receivable disagree, the dispute agent reads both ledgers and the documents behind them — credit notes, agreements, goods receipts, proofs of delivery, the payables inbox — and says which side is right, with citations and a confidence. It drafts the fix and the request for the entity that must make it; a person edits and sends it, and the agents re-match once the entity acts.
No. The agents read the ledgers; they never book in one, never change an invoice or an amount, and never send a request a person has not seen. The fix is booked by the entity's own finance controller.
A check agent recalculates the whole run from both ledgers of every pair, with its own extract, without seeing the netting agent's figures. The run reaches approval only when the two agree to the cent; any difference stops it.
The netting agent plans one FX trade per currency and flags any trade above your single-trade limit for the group treasurer. After approval the settlement agent drafts the FX tickets, payment files, settlement journals and regulatory reports; treasury operations executes the trades and releases the payments with the bank token.
They are listed as participants that settle gross, outside the cycle, with the local reason for each. The netted payments of the entities that take part are still reported where payment statistics require it — the settlement agent drafts those reports with the run.
Yes. Entities confirm their own positions, treasury sends every request and decides every dispute, the group treasurer approves the run with a reason code and e-signature, and payments are released by treasury operations with a second person in the bank portal. The agents never approve anything or move money.
The Agentic Solution Engine builds and deploys it from your requirements and documents — your netting policy, entity list, intercompany agreements and a past cycle's invoices — and it goes live once every quality gate has passed. We will walk you through it on one of your own cycles first.
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