Finance Manual - Working with bill of exchange in debtor accounts
Working with bill of exchange in debtor accounts
Introduction
A company accepting a bill of exchange as an instrument of payment will want
to print bills of exchange, and register all incoming bill of exchange payments.
It is important to maintain a portfolio of all outstanding bill of exchange
payments and other information such as bill of exchange due dates, amounts paid,
amounts discounted at the bank, etc. A bill of exchange can have different
statuses, each with their specific financial entries. Examples are 'Outstanding
bills of exchange', 'Discounted', 'Cancelled', etc.
The bill of exchange can be initiated by the company or by the
debtor/customer. The financial entry can be posted to different accounts. The
predefined accounts per status are defined in [Tables, Maintenance, Banking,
Cheques & Bill of exchange, Cheque & B/E accounts], otherwise the
setting will do.
The following flow chart displays the process that Exact Financials C/S
follows:
Procedure
- Entering company initiated bills of exchange in debtor accounts. You can
select the whole amount of an outstanding item. When the entire amount has
been selected, the outstanding item will register an amount of
0.00 and no more selections can be made for this outstanding
item. If a partial payment is made, an outstanding item will show the amount
that has not been selected yet, which can be allocated to a new cheque, a bill
of exchange at a later date, or paid through another payment method such as
cash or bank remittance.
- Printing company initiated bills of exchange in debtor accounts. Selected
bills of exchange must be printed to make journal entries of the payments
later on.
- Receiving cheques and bills of exchange in debtor accounts. You will have
to register receipt of a creditor/company or debtor/customer initiated bill of
exchange, which has been signed and returned (or sent) by the debtor/customer.
- Deleting bills of exchange in debtor accounts. You can delete printed and
or received cheques and bills of exchange if no journal entries have been
created for them. If journal entries have been made, it may be necessary to
cancel the cheques or bills of exchange you want to delete.
- Changing outstanding items or bills of exchange. After you have checked
your list of outstanding items you may need to make some changes to the
description, due date, or you may want to block them.
- Entering remittances. When bills of exchange are sent to the bank to be
discounted or to be cashed, a remittance has to be included which indicates
the corresponding bill of exchange numbers, debtors, amounts and due dates.
- Journalizing bills of exchange in debtor accounts. When remittances have
been printed (and if necessary accepted), or when bills of exchange have been
received, you can journalize them.
- Canceling bills of exchange. A bill of exchange can be canceled in any
status.
- Cleaning cheques and bills of exchange. Once you have paid with a bill of
exchange you can delete the historical data on the bills of exchange after
some time, to save disk space.
- Working with cheques and bills of exchange reports for debtor accounts.
You can check the status of cheques and bills of exchange in several reports.
Together they provide a clear picture of cheques and bills of exchange data in
your company.
You can select [Banking, Cheques & B/E payment debtors, Select outstanding
items] the whole amount of an outstanding item. When the entire
amount has been selected, the outstanding item will register an amount of
0.00, which indicates that no more selections can be made for this
outstanding item. If a partial payment is made, the outstanding item will show
the amount that has not been selected yet, which can be allocated to a new
cheque, a bill of exchange of a later date, or paid through another payment
method such as cash or bank remittance. Cash or bank payments are entered in
[Ledger, Journal entry*].
The first steps in the process of creating a bill of exchange in your company
may vary:
- The bill of exchange is initiated by the company and sent to the
debtor/customer, who will sign the document and cancel it.
This means that the company will print the bill of exchange. This can be
done after making a selection from the list of outstanding items in the
financial accounts. After printing, the bill of exchange is sent to the
debtor, who may sign it. Receipt is registered.
- The bill of exchange is initiated by the debtor/customer (signed or not
signed) and sent to the company.
This means the company needs to match the received bill of exchange to one
or more outstanding items.
Financial entries are created by journalizing the cheques and bills of
exchange. Before journalizing you can still delete the cheques and bills of
exchange if mistakes occurred while selecting, printing or receiving bills of
exchange.
Exact Financials maintains a history of all bills of exchange created. When
this information is no longer required a group of bills of exchange can be
deleted. This avoids unnecessary use of hard disk space.
Once you have selected the bill(s) of exchange you can start the process by
making final prints [Banking, Cheques & B/E payment debtors, Print cheques &
B/E's].
Troubleshooting
- I have selected outstanding items for a payment run. I want to print
them, but I do not remember which outstanding items I have selected.
Press in [Banking, Cheques & B/E payment debtors, Print cheques &
B/E's] the 'Show selection' button. Here you can check your selection. If you
want to make changes, you will have to go back to [Banking, Cheques & B/E
payment debtors, Select outstanding items]. A message will appear stating that
you have already made a selection. Now you can delete or modify the previous
selection of outstanding items.
A financial entry can be created after registering receipt [Banking, Cheques & B/E payment debtors, Receive cheques &
B/E's] of the signed (or not signed) bill of exchange. After you have
registered receipt of the signed and canceled bill of exchange by the
customer/debtor, it can be journalized. The outstanding item is updated and will
be canceled and an outstanding bill of exchange will be created.
You can also register a cheque or a bill of exchange initiated by the debtor
and match it with an existing outstanding item. Furthermore, you can also
register a prepayment of a bill of exchange.
Afterwards, you can create journal entries except for those bills of exchange
that has a debtor with method of payment : 'BE direct to bank" .
If in [Debtors, Master data, Maintenance debtors] on 'Bank' tab, the method
of payment is chosen for 'BE direct to bank' all cheques and bill of exchanges
will automatically have the status receive, without journalizing first.
Before journalizing bills of exchange you can still delete [Banking, Cheques & B/E payment debtors, Delete cheques &
B/E's] them. You may decide to delete a bill of exchange because you
made a mistake while printing or while registering its receipt. Once a journal
entry has been created for the cheque or the bill of exchange, it can no longer
be deleted. This means you need to cancel it.
After checking your outstanding item list, you may need to make some
changes.
The following options are available:
- Use [Banking, Cheques & B/E payment debtors, Change, Change
outstanding items] to change the outstanding items as for the description, the
week, the due date invoice, if you want to block them, the reminders, the
payment reference and the method of payment.
- Use [Banking, Cheques & B/E payment debtors, Change, Change
outstanding B/E's] to change some elements of the bill of exchange. You can
make changes such as the invoice due date and the bill of exchange
description, blocking a bill of exchange and entering bank account. This can
be useful if you agree with your debtor/customer that they will pay using the
bill of exchange on another date.
The bills of exchange and the cheques you want to select for a remittance,
have to have the status 'Received'. You can give the cheques and bills of
exchange this status, by journalizing the cheques or bills of exchange in the
status 'Received'. After you have done this, you can select them for a
remittance.
Use these functions to create remittances, including bills of exchange and
cheques to be discounted or to be cashed. When bills of exchange are sent to the
bank to be discounted or to be cashed, a remittance has to be included, which
indicates the corresponding bill of exchange numbers, debtors and due dates.
- First create a remittance in [Banking, Cheques & B/E payment debtors, Remittances, Select
cheques & B/E's] by selecting the
corresponding cheques and bills of exchange using the selection criteria
available.
- Then you can choose the remittance type {To be
discounted} or {To be cashed} and a bank journal.
- Then print the remittances in [Banking, Cheques & B/E payment debtors, Remittances, Print
remittances].
- The journal entries will be created.
- The remittances of the type {To be discounted} should
also be accepted. When a remittance is of the type {To be discounted} the bank
will send a confirmation of acceptance of the remittance.
- The acceptance can be included in the remittance for
all bills of exchange or for only a few.
- Accept remittances in [Banking, Cheques & B/E payment debtors, Remittances, Accept
remittances].
- Financial entries are created after journalizing in [Banking, Cheques
& B/E payment debtors, Journalize cheques & B/E's] accepted to be
discounted.
If the setting 'create entry in suspense account debt to bank' ('General'
tab) is enabled, then there will be an extra entry and journalized once the due
date has expired.
Troubleshooting
- Can I include a bill of exchange to be discounted and a bill of
exchange to be cashed on a single remittance?
No. Select the bills of exchange to be discounted in [Banking, Cheques
& B/E payment debtors, Remittances, Select cheques & B/E's] and print
them in [Banking, Cheques & B/E payment debtors, Remittances, Print
remittances]. Then do the same for bills of exchange to be cashed.
[Banking, Cheques & B/E payment debtors, Remittances, Delete
remittances]
After remittances have been printed, and if necessary accepted, or when
cheques or bills of exchange have been received, you can journalize [Banking, Cheques & B/E payment debtors, Journalize cheques
& B/E's] them.
The first step in journalizing should be done before entering remittances.
The cheques and bills of exchange you want to enter into a remittance should
have the status 'Received'. To get this status a cheque or bill of exchange
should be journalized in the status 'Received'.
After you have paid your outstanding item with a cheque or a bill of
exchange, the due date has passed, the corresponding entry has been created. In
all, the process of paying is completed, you can clean [Banking, Cheques & B/E payment debtors, Clean cheques &
B/E's] the historical file of old cheques and bills of exchange.
They are then deleted to save disk space.
Finance Manual > Contents
> Working with bill of exchange in debtor accounts
| Main Category: |
Support Product Know How |
Document Type: |
Online help main |
| Category: |
On-line help files |
Security level: |
All - 0 |
| Sub category: |
Details |
Document ID: |
06.840.310 |
| Assortment: |
Exact Financials (v3)
|
Date: |
04-10-2006 |
| Release: |
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Attachment: |
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| Disclaimer |