Bill of Exchange Portfolio

Definition

A collection of bills of exchange (or checks).

Use

Typically, each branch office of a business has its own portfolios, possibly with separate portfolios for long- and short-term bills respectively. By law, you cannot store bills of exchange and checks together in the same portfolio – separate portfolios are required. Furthermore, you must store bounced instruments separately from others.

In the system, you can define any number of portfolios, depending on how you want to organize your bills, but in line with the above regulations, you need at least four, one for each of the following:

Bills receivable

Bounced bills receivable

Checks receivable

Bounced checks receivable

Customizing

You maintain portfolios in Customizing for Financial Accounting (FI), under Bank Accounting → Business Transactions → Bill of Exchange Transactions → Bill of Exchange Receivable → Post Bill of Exchange Receivable → Bill of Exchange Portfolios → Define Bill of Exchange Portfolios.

You assign each portfolio to a special G/L account. The system records all the bills that you post to this portfolio on the specified account.

You also assign each portfolio to two further G/L accounts. The system uses these accounts when you:

Transfer a bill from this portfolio to another (see Transfer of a Bill of Exchange Between Portfolios )

Present a bill to a vendor (see Interim Account )

For each of these two accounts, you also specify which liability accounts the system is to use (see Bill of Exchange Liability Account ).

Day-to-Day Activities

When you enter or process a bill of exchange in the system, you specify which portfolio the bill is stored in. The system then assigns it that portfolio and posts the bill to the appropriate G/L accounts.

This graphic is explained in the accompanying text.

A customer sends you a bill of exchange by means of payment. When you enter it in the system, you specify which portfolio you want to store it in, and the system automatically debits it to the account that you have specified. Similarly, when you send the bill to the bank for collection, the system removes it from the account.