Interoperator Settlement — Net Monthly Payment
Settling the net monthly interoperator position — paying or receiving the balance after netting termination income against origination costs.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Interconnect Payable (Net Settlement) | Liability (-) | 25,000.00 | - |
| Cash / Bank | Asset (-) | - | 25,000.00 |
💡 Accountant's Note
Operators settle on a net basis monthly. If interconnect payable exceeds receivable, a net cash payment is made. The gross income and expense were already recognized when traffic was carried.
Practitioner & Systems Framework
💻 ERP Architecture
Net settlement payments are processed through the AP module after the monthly reconciliation between the operator and each counterparty is agreed. The net settlement amount (payable minus receivable) is remitted via bank transfer. The payment clears the net payable balance in the GL. Where settlement is on a gross basis (separate payments in each direction), two payment instructions are raised. The settlement is tracked by counterparty in the wholesale billing system. WHT may apply to the gross settlement amount paid to foreign operators (see tel-wht-international-payments).
⚠️ Audit Flags
Auditors confirm that the net settlement amount agrees to the signed monthly settlement statement exchanged with each operator. Test that gross income and expense are both fully recognised in the P&L before the net settlement — the settlement itself is purely a balance sheet transaction. Confirm that WHT is correctly applied before the net payment is made. Review any agreed payment deferral arrangements for operators with delayed settlement — ensure the receivable is not netted against the payable in the balance sheet unless the legal right of offset exists.
📄 Required Documentation
Signed monthly settlement statements by counterparty, net settlement calculation, bank payment confirmations, WHT calculation and ISTD remittance, offsetting right assessment (for netting in the balance sheet), and outstanding disputed items register.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.