A check/bill of exchange in Accounts Receivable is referred to in the system as a reverse bill of exchange. Under this procedure, your customer pays an invoice by sending both a check and a reverse bill of exchange on which you are entered as the drawer. At the same time, your customer sends you a check/bill of exchange. You are entered as the drawer on the bill of exchange.

You post the check to the incoming checks account, clearing the receivable. You also post the bill of exchange to the customer account since a bill of exchange receivable now exists against your customer. The system creates the offsetting entry on a clearing account and automatically posts it to the special G/L account "Contingent claims from check/bill of exchange". The bill of exchange liability which might arise if the bill of exchange is protested is shown on the special G/L account.

Once the due date and any country-specific protest period have elapsed, you cancel the bill of exchange receivable and the bill of exchange liability. To do this, you select the bill of exchange from the special G/L account. The system makes the postings to the customer account and the clearing account.