Answer / hannah

Hi,
Bills of exchange may be defined as a commitment subscribed
by your customer to pay a certain amount on a given date
upon presentation of the bill of exchange. They can be used
to materialize installment payments.

For example, you have accepted that your customer pays the
invoice amount in 3 monthly installments of 1000 USD each.
You will issue 3 bills of exhange of 1000 usd each and
maturing in month in month m, m+1 and m+2. The bills of
exchange will be sent to your customer for
acceptance(customer signs them).

Once accepted they will be returned to you. You will have to
post accounting entries. But note that even though the
accepted bills of exchange can be considered as payment, you
cannot clear the outstanding customer invoice until the
bills are effectively paid at maturity date. You then have
to post the bills of exchange as a special GL transaction.

Again once you have received the bills of exchange you may
decide to discount them right away with your bank and this
is done with or without recourse. Depending on the option
choosen, accounting entries are different. by discounting
the bills you receive payment of the bill and this can be
used to clear the outstanding customer invoice.

But note that until the bill is finally paid by the customer
at maturity date you remain liable. You account for this
liability by making postings which will show the discounted
bills of exchange as a contingent liability. They do not
show in the balance sheet itself but appear in an appendix
of the balance sheet.

Answer / sridhar

Bill of Exchange is a rectim account. We have received
the bill from customer against sales value. The bill is
submitted at bank. after completion of the period the amt
paid by customer to bank.

Answer / sajid khan

Bill of exchage is a legal document which is used for credit
payment.it can be easily discounted by bank,endorced.

Answer / venkatanarayana

hi frds i want to give some more additional information to
the answer 1 given by sridhar.

Mr sridhar explained abt BOE. But why we need to go for
bills of exchange?

Generally we will go for bills of exchange for getting loan
from bank. it is also one form of getting loan from the
bank. we will keep bills with the bank and we will get loan
from the bank. the loan value(varies from 80-95% of bills
amount) depends on various things like maturity date, risk,
interest etc. Bank will recover the amt against the customer
payments.

Bank will charge some thing for bills of exchange, so banks
get benefit from it and company will get liquidity so
company can able to do more turnover.


thanking you
venkat
+91-9871905974
venkatanarayana.k@rediffmail.com

Answer / aarti sharma

a "bill of exchange" or a "Hundi" is a kind of legal
negotiable instrument used to settle a payment at a future
date. It is drawn by a drawer on a drawee wherein drawee
accepts the payment liability at a date stated in the
instrument. The Drawer of the Bill of Exchange draw the
bill on the drawee and send it to him for his acceptance.
Once accepted by the drawee, it becomes a legitimate
negotiable instrument in the financial market and a debt
against the drawee. The drawer may, on acceptance, have the
Bill of Exchange discounted from his bank for immediate
payment to have his working capital funds. On due date, the
bill is again presented to the drawee for the payment
accepted by him, as stated therein the bill.

Answer / srikanth

Bill of exchange is an unconditonal order signed by the
maker to pay cetain sum of money only to the ordered or
bearer person.
it is a chance given by the saler to the purchaser to pay
money in the future date.it also helps the saler to get
discount by the bank and easy money.

Answer / lamin

A Bill of Exhange is a negotiable financial instrument by
the drawer (creditor) to the drawee (debtor) to pay a
certain amount of money at a matured date.

Answer / mr shadik

Bill of exchange
A bill of exchange or "draft" is a written order by the drawer to the drawee to pay money to the payee. A common type of bill of exchange is thecheque (check in American English), defined as a bill of exchange drawn on a banker and payable on demand. Bills of exchange are used primarily in international trade, and are written orders by one person to his bank to pay the bearer a specific sum on a specific date. Prior to the advent of paper currency, bills of exchange were a common means of exchange. They are now used as often today.

Answer / divya

The bill of exchange is an order by a creditor upon his
debtor requiring him to pay the moneyto the person
specified.

Answer / anuradha saha

A bill of exchange is an unconditional instrument in
writing which is used to pay the holder of the bill.

Error While creating Third Party order in VA01 :- HI am trying to create Third Party order in VA01 in my sand box with material ( BANS item category Group) getting error NOT POSSIBLE TO DETERIMINE A CONSUMPTION ACCOUNT in OBYC GBB i tried to do some setting in VAX , VBR with valuation class 0001 but dont know the exact GL Account . kindly help.

1 Answers  

What are closing operations? How we have done closing operations

1 Answers  

What is Lock box in sap fico?

0 Answers  

What is a process pricing report? What is it used for?

0 Answers  

Hi, I am a FI consultant with 1.6 yrs experience..can anybody help me to learn CIN FI part..mail me if u have any documents related to that..rajendranmba@gmail.com....thanks.

0 Answers  

what is validation &substution

1 Answers   IBM,

You are entered a credit memo posting to vendor who is linked to a customer on 1st of May 2003 for your company code but you have not specifically entered the same data in customer till now. You have lots of entries appearing in the vendor and customer account prior to that date of May 2003 also. You are making a manual payment to the vendor ? select out of the following which statements are correct. a. Credit memo document will get the special payment term as per vendor master definition. b. Customer items will not be shown while paying the vendor as customer is not linked. c. Customer items will be shown only postings after the date 1st May 2003. d. All items of customer and vendor will be available for payment provided payment is same from 1st May 2003. e. All items of customer and vendor will be available for payment provided Special GL items are also selected in selection screen irrespective of the activation date

0 Answers  

What is Planning in G/L?

0 Answers   Cognizant, SofTech,

What is "extended star schema" and how did it emerge?

0 Answers  

in a/r how can you enter the cash against customer?

3 Answers   IBM,

What if RFEBCK00? What are its advantages?

2 Answers  

Hello Friend, I wanna to do job in SAP as a FI Consultant.I wanna to knw What is the important question for FI. consultant. Employer 'll ask me? get back to me soon bye

0 Answers   IBM,