You have a payable of $11,400 that you are going to pay by bill of exchange. The payment program clears the open items and creates the bill of exchange.

The following postings arise when making payment by bill of exchange:

1. You have a payable of USD 11,400.
2. The payment program posts a bill of exchange payment to the vendor account and to the special G/L account "Bills of exchange payable".
3. With an offsetting entry to the vendor account, the payment program clears the open items paid by the bill of exchange. The program posts automatically to the "Payables for goods and services" reconciliation account.

Depending on your system configuration, two further line items can be automatically created. One posting is made to a bank subaccount, which shows the bill liability to the bank. The offsetting entry is made to a corresponding clearing account, so that the document has a zero balance. The posting to the bank subaccount is used primarily for cash management and forecasting purposes where information is required on the expected outflow of funds from bill of exchange payments.



The postings for cash management and forecast are as follows:

4. The payment program posts the bill amount to a bank subaccount, which shows the bill liability to the bank.
5. The offsetting entry is made to a corresponding clearing account, so that the document has a zero balance.