Reversing Bills of Exchange
Reversing Bills of Exchange
You can reverse bill of exchange postings at different stages, depending on the circumstances requiring reversal. There are several reasons why you might need to reverse a bill of exchange. If, for example, a bill of exchange is protested, the last holder of the bill of exchange might require you to pay the bill of exchange amount. In this case you would need to reverse the bill of exchange payment, and post a regular receivable to your customer.
When reversing a bill of exchange, the following cases must be distinguished:
Case 1: Clearing Open Items Without a DepositYou have cleared open items with the bill of exchange payment. The bill of exchange has not yet been deposited.
Case 2: Clearing Open Items with a DepositYou have cleared open items with the bill of exchange payment. The bill of exchange was used for discounting.
Case 3: Payment on Account Without a DepositYou have posted a bill of exchange payment without clearing any open items. The bill of exchange has been posted as a payment on account and has not yet been deposited at a bank for discounting.
Case 4: Payment on Account After DepositYou have posted the payment, have not cleared any open items, and have already deposited the bill of exchange at a bank.
The following topics describe how you reverse the bill of exchange in each case.
When you reverse a bill of exchange, you may also want to reverse the bill of exchange charges. This may be necessary if you have entered and posted a bill of exchange payment incorrectly. The procedure is the same as for other reversal procedures. You can find further information in
Reversing Documents