Parent Instrument Linking
The Parent Instrument Linking feature allows you to link Child Instruments (e.g., invoices) to Parent Instruments (e.g., purchase orders).
When a Child Instrument is funded, the system automatically uses part (or all) of the disbursement amount to repay (close off) the outstanding balance on the Parent Instrument before sending any remaining funds to the beneficiary.
This ensures repayments are handled seamlessly and accurately across related instruments.
Understanding Parent-Child Linking
Parent–Child linking creates a relationship where:
The Parent Instrument represents an original obligation (e.g., Purchase Order).
The Child Instrument represents an item derived from it (e.g., an Invoice).
When the Child Instrument is funded:
The platform first repays the Parent Instrument (if any balance remains).
Any excess amount is forwarded to the Beneficiary.
If Child Disbursement < Parent Outstanding, the entire disbursement is used for repayment.
No amount is forwarded to the beneficiary.
The system automatically records a partial repayment for the Parent Instrument.
Linking a Child Instrument During Upload
When uploading a new instrument, you can link it directly to a Parent Instrument using the Parent Instrument Ref field.
Go to Upload Instruments in your environment.
In the upload form, find the field “Parent Instrument Ref.”
Enter the reference number of the Parent Instrument you want to link to.
Linking via Upload File
You can also specify the Parent Instrument Ref directly in your upload file (Excel/CSV).
Add a new column named Parent Instrument Ref.
For each child instrument row, enter the reference of the parent instrument.
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Parent Instrument Reference Requirements
The Parent Instrument Ref must meet all the following conditions:
It must be an existing instrument in the system.
It must have the same currency as the Child Instrument.
It must belong to the same Buyer–Supplier pair.
The parent instrument must be funded
Approving Linked Child Instruments
Once your instruments are uploaded:
Review the uploaded records.
Proceed with your standard approval workflow.
Continue until the instruments are funded.
The linking becomes active only once the child instrument is disbursed.
Automatic Repayment Logic at Disbursement
When the Child Instrument is funded, the platform automatically determines:
Component | Description |
Total Disbursement Amount | The total funds disbursed for the Child Instrument. |
Repayment Instruction (Parent) | Amount used to repay the linked Parent Instrument (includes Parent’s collection account details). |
Balance Forwarded (Beneficiary) | Remaining amount (if any) forwarded to the Beneficiary’s account. |
How Repayment Amounts Are Calculated
Full Repayment
If Child Disbursement ≥ Parent Outstanding:
The Parent Instrument is fully repaid.
The system marks it as settled.
Any remaining balance is sent to the Beneficiary.
Partial Repayment
If Child Disbursement < Parent Outstanding:
The entire disbursement goes toward repaying the Parent Instrument.
Nothing is forwarded to the Beneficiary.
The system records a partial repayment.
No Repayment
If Parent Outstanding = 0:
The full disbursement goes to the Beneficiary.
No repayment entry is generated.
Reviewing the Disbursement File
After disbursement, the disbursement file contains all repayment and forwarding details, including:
Field | Description |
Parent Instrument Ref to Repay | Parent instrument being repaid |
Parent Outstanding Before | Outstanding balance before repayment |
Amount Applied to Parent (Total) | Amount repaid to Parent Instrument |
Parent Outstanding After | Balance remaining after repayment |
Amount to Forward to Beneficiary | Remaining funds sent to Beneficiary |
Parent Collection Account Details | Bank details for repayment remittance |
Beneficiary Account Details | Bank details for remaining funds |
Repayment Breakdown Details
Each Parent repayment includes a component-level breakdown showing how the amount was allocated:
Repayment order:
Principal
Annualised Fees
Charges
Late Penalty Fees
Net Unfinanced Balance
Multiple Child Instruments per Parent
A single Parent Instrument can be repaid by multiple Child Instruments.
Example:
A Parent Instrument with an outstanding balance of AED 1,000,000 can be repaid through several Child Instruments (e.g., 10 invoices of AED 100,000 each).
Each repayment updates the Parent’s outstanding balance.
Once fully repaid, the Parent Instrument automatically moves to Settled status.
To Recap
With Parent Instrument Linking, you can:
Ensure Parent obligations are repaid first.
Simplify complex repayment structures.
Automate fund allocation between Parent and Beneficiary accounts.
Reduce manual reconciliation work.