Additional Process Information

While bills of exchange are issued before the billing due date in France and Spain, in Germany and Austria bills of exchange are issued on the billing due date. The debtor thus has the benefit of paying his debt later, actually at the time of the bill of exchange due date. However he has to bear the charges for the bill of exchange.

The system handles bills of exchange as special G/L transactions. Thus, these operations are processed in the sub-ledger, separately from other operations and are posted to a specific G/L account in the general ledger. As a result, you have an all-time overview about bill of exchange payables and receivables. In general, it is not necessary to make transfer postings for a display on the balance sheet.

One can post the following types of bills of exchange:

• bills of exchange receivable
• bills of exchange payable
• debit-side and credit-side reverse bills of exchange.

For the posting of special G/L transactions, the system uses specific posting keys that are supplemented by a special general ledger characteristic. In this case (payment of bill of exchange receivable) the system uses posting key 09 (debit posting) with the special general ledger characteristic W.

Within the operation bill of exchange usage (here: refinancing to a bank) the system posts to the account and the bank sub-account. The amount of the bill of exchange is credited to the account - deducted by the bill of exchange charges - and displayed by a bank statement. The bank charges are posted to the respective revenue accounts after entering them. The reverse posting is done automatically into the bank sub-account that displays the bank-related bill of exchange liability. After the expiration day and the country-specific protest period has passed by, you cancel the bill of exchange claim and the bill of exchange liability and clear the accounts receivable, special general ledger and bank sub-accounts.

The following data has been entered in Customizing especially for this demo:

• alternative reconciliation account for the bill of exchange processing:

For the following cases we set up deviating accounts that are valid for all reconciliation accounts:

Bill of exchange non-rediscountable: is posted to account 126000

Remaining risk of bill of exchange: is posted to account 196800

Bill of exchange claim: is posted to account 127000

Reverse bill of exchange: is posted to account 196200

Bill of exchange rediscountable: is posted to account 125000

• Bank operations

For the bank operations as well, we set up respective G/L accounts:

Bank discount charges and bank collection charges are posted to account 221000

Bank bill of exchange tax is posted to account 275200

Discount charge revenues are posted to account 275100

Revenues from collection charges are posted to account 275300

Revenues bill of exchange tax are posted to account 275200

• Default values

For charges and discount rates we entered the following defaults: The discount rate is
10 % and the charges are EUR 2,50.

Bank sub-accounts

The following sub-accounts have been created for the bill of exchange usage:

Account	Usage	bank sub-account for commitments
113100	Discounting	113107
	Forfaiting	113107
	Collection	196600
113200	Discounting	113207
	Forfaiting	113207
	Collection	196600
113300	Discounting	113307
	Forfaiting	113307
	Collection	196600