When a Bill Bounces at a Vendor (SAP Library

When a Bill Bounces at a Vendor

Purpose

This process describes how you record what happens when a bill of exchange bounces after you have presented it to a vendor.

Prerequisites

You have received a bill of exchange receivable and presented it to a vendor by way of payment (see Payment by Bill of Exchange). At this point, you only have two open items, one for the bill of exchange receivable, and one for the contingent liability.

The bill's due date has now elapsed and the drawee has refused to pay the bill – the bill has bounced.

Process Flow

When you receive the vendor's notification that the bill has bounced, you record the transaction in the system (see Recording a Bounced Bill Presented to a Vendor).

The system creates two accounting documents:

One to reverse the bill of exchange receivable and its contingent liability:

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One to reopen the vendor invoice and create a bounced bill of exchange receivable:

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The system also prints out a transaction record, which you file away for future reference.

You contact the customer to find out how it intends to pay. Once you have come to an agreement, you can clear the bounced bill from the system (see Clearing a Bounced Bill).

The system creates an accounting document to clear the bounced bill of exchange and reopen the customer invoice:

This graphic is explained in the accompanying text

Again, the system prints out a transaction record.

Result

After the bill has bounced, you have two open items left – a receivable on the customer account and a payable on the vendor account.