Entering and Posting Bill of Exchange Usage 

When you deposit a bill of exchange at a bank, you must post bill of exchange usage. The possible types of usage are as follows:

You can post the usage in various ways:

Only manual posting is described in the text that follows. If you require further information on automatic processing, see the online documentation for this program.

Entering and Posting Bill of Exchange Usage

You post bill of exchange usage once the bank credits the bill of exchange to your bank account. You post the cash receipt to your bank account and post the bill of exchange charges to the corresponding expense accounts. The system creates the offsetting entry automatically. It is posted to the bill of exchange liability account (bank subaccount).

If the drawee does not pay the bill of exchange on the due date, the bill is subject to protest. The holder of the bill of exchange uses his or her right of recourse and submits the bill of exchange to someone connected with it. All those who have issued, accepted, or endorsed a bill of exchange are liable to the holder as joint debtors. This liability to recourse is managed as a potential bill liability in the system, and is shown in a separate account (potential bill liability account). The system posts to this account automatically when you post the bill of exchange usage. If you wish, you can also manage a separate liabilities account for each usage type and for each bank. The usage indicator differentiates the possible usage types.

You do not reverse the bill liability until after the due date and the protest period have elapsed and there is no longer any liability to recourse.

The posting procedure is the same no matter how the bill of exchange is used. To start with, you enter the header data and posting specifications in the first screen. You then select the bills of exchange for which you want to post the usage. If no further line items are required, you post the document.

The system offers you two options for sorting open items:

  1. For individual processing of bills of exchange, choose

Accounting ® Financial accounting ® Accounts receivable ® Document entry ® Bill of exchange ® Discounting (Collection, Forfaiting)

For mass processing of bills of exchange, choose

Accounting ® Financial accounting ® Banking ® Input ® Bill of Exchange presentation ® From account

The system displays a screen where you can enter bill of exchange usage.

If you enter the system with Bank accounting, the bill of exchange presentation is posted in the foreign currency without exchange rate differences (bank subaccount/bank commitment account).

You enter via Accounts Receivable and post a bill of exchange in a foreign currency. This is posted to an exchange rate difference account if the foreign currency to local currency ratio has changed between posting and presentation of the bill of exchange, and you have only entered the foreign currency amount.
To avoid any exchange rate differences, enter the foreign currency amount and the local currency amount of the bill of exchange you want to present.

Carry out these steps too:

  1. Enter data in the document header in the required fields. The field is filled with D, F or I according to the usage type.

    2. Besides the Bank account and the Amount, the following fields are also relevant:

    Use

    You use the usage indicator to differentiate between the bill liability accounts (bank subaccounts). The usage indicator can be used later as a selection criterion when the bill liability is cleared. In the standard system, D is used for Discounting, F for Forfaiting, and I for Collection.

    Bank charges

    In this field, enter the bank fees that the bank has charged for accepting the bill of exchange. The system uses the usage indicator to determine the corresponding expense account and then posts the bank charges.

  2. Choose Edit ® Select bill of exchange

    3. You enter the document numbers of the bills of exchange that you have deposited in the bank in the following screen. If you know which document items the bill of exchange referred to, you can enter them here.

  3. Enter the document numbers of the bills of exchange that you require.

    4. If the document contains several bill of exchange line items, these are displayed together for you to select the appropriate line item.

    In such a case you then select the required bills by choosing the corresponding bill of exchange line items followed by Edit ® Continue processing. Choose continue

    You return to the selection screen for bills of exchange.

  4. You post the bill of exchange usage with Document ® Enter.

The system posts the incoming payment to the bank account, the bill of exchange charges to the corresponding expense accounts, and the potential bill liability to the bank subaccount.

Reversing the Bill Liability

After the expiration date and the country-specific protest period have elapsed, you can reverse the bill of exchange liability. There is no longer any recourse liability (bill of exchange liability).

At this point, the bill of exchange receivable is still shown on the customer account, the special G/L account and the liability account (bank clearing account), as shown below. These accounts have to be cleared.

Proceed as follows to reverse the bill receivable and bill liability as follows:

  1. Choose Posting. ® Bill of exchange ® Reverse contingent liability.

    2. The screen where you enter document header data and selection data is now displayed.

  2. Enter the document header data, the account number of the special G/L account for bills of exchange receivable, and the due date. All further bill of exchange selection data is optional.

    3. The main fields for reversing the potential bill liability are:

    Use

    The usage indicator is applied to select specific bills of exchange for which the liability is to be reversed.

    Due date

    The system compares the date you enter with the due date (expiry date) in the document line item, taking into account the protest period (payment period). The protest period is country-specific. The system selects bills of exchange due on or before this date.

    Document number

    You can limit the number of bills selected by specifying a document number or a document number interval.

    Customer

    You can determine how many bills are selected by specifying a customer account number or an account number interval.

  3. Choose Edit ® Edit line items.

    4. The system displays the selected bills of exchange.

  4. Place your cursor on the line item that you want to select, and choose Edit ® Item on/off.

    5. The selected line item is highlighted or displayed in another color.

  5. Choose Document ® Post.

The system clears the bill of exchange receivable in the customer account, the special G/L account and the bill liability account (bank clearing account).