When a Bill Bounces at a Bank
Purpose
This process describes how you record what happens when a bill of exchange bounces after you have presented it to a bank.
Prerequisites
You have received a bill and presented it to a bank for collection (see Collection of a Bill of Exchange ). The system has created the following accounting documents:
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 bank’s notification that the bill has bounced, you record the transaction in the system (see Recording a Bounced Bill Presented to a Bank ).
The system creates two accounting documents to post the bill:
One document to remove the bill from the bill of exchange liability account and from the bill of exchange receivable account:
One document to remove the bill from the interim account and add it to an account for bounced bills:
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 Presented to a Bank ).
The system creates an accounting document to remove the bounced bill and reopen the invoice:
Again, the system prints out a transaction record.
Result
The only open item that you have is the new invoice in accounts receivable. All other items have been cleared.