Bill of Exchange Receivable

Purpose

Bills of exchange serve for a short-term financing within goods trading. If a customer pays his invoice by a bill of exchange payment, the vendor provides him with a financing (payment after three months). The bill of exchange claim, the vendor has against the customer is proved by the ownership of the certificate (the bill of exchange). This is a security for the vendor.

Bills of exchange can be used for a refinancing. The vendor, can use the bill of exchange e. g. as means of payment to clear his own payables at a vendor's or he can discount it at his bank, i. e. the bank buys the bill of exchange not yet due and deducts interests up to the due date.

In this process, we will sell a product to a customer on a loan basis. Customer 2145 pays the invoice with the help of a bill of exchange. We pass this bill of exchange to our bank for a refinancing. At the bank, it is used for a discounting. The bill charges (e. g. discount and collection charges) are debited to the customer as claims. After the expiration day and the country specific period for the bill of exchange has passed by, charge off the bill of exchange liability (recourse).

You can find more information about this process under .

Process Flow

You can find the data for this process under .

1. 
   
Settings for this Demo
2. 
   
Creating a Sales Order
3. 
   
Delivering the Sales Order
4. 
   
Creating a Billing Document
5. 
   
Incoming Payment with Bill of Exchange
6. 
   
Printing the Charges for a Bill of Exchange
7. 
   
Bill of Exchange Usage (Discounting)
8. 
   
Reverse Contingent Liability
9. 
   
Line Item Display

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

Data Used During This Process

Field	Data
Company Code	1000
Customer	2145
Order type	OR (standard order)
Material	M-17 (Jotachi SN4000)
Order quantity	250 (PC)
Shipping point	1000
Warehouse number	010
Plant	1000
Account	113100
Alternative reconciliation account	125000
Account for bill of exchange liability	113107
Account for discount expense	221000
Account for revenue discount charges	275100
Account for revenue collection charge	275300

Settings for this Demo

Use

For this process, you should determine beforehand whether you want to set the open items to active or inactive within clearing processing. Here, you determine the status inactive for the selected items. In a later step, you will control the activation of your items with a double-click. You should also already determine your printer for your correspondence to be handled at a later time (bill of exchange requisition).

Procedure

1. Call up the transaction as follows:

Menu Path	Accounting ® Financial Accounting ® Accounts payable ® Environment ® User parameters ® Editing options
Transaction Code	FB00

2. Choose the Open items tab page.
3. Select Selected items initially inactive.
4. Choose Options ® Change user master.
5. Choose .
6. Call up the transaction as follows:

Menu Path	System ® User profile ® Own data
Transaction Code	SU3

7. Choose the Defaults tab page and in the field OutputDevice enter your printer.
8. Choose .

Creating a Sales Order

Use

A customer requests a specific product. In this first step, you enter a sales order.

Procedure

1. Call up the transaction as follows:

Menu Path	Logistics ® Sales and Distribution ® Sales ® Order ® Create
Transaction Code	VA01

2. Enter the following data:

Field	Data
Order Type	OR (standard order)

3. Choose .
4. Enter the following data:

Field	Data
Sold-to party	2145
Ship-to party	2145
Purch.order no.	user-defined entry
Req.deliv.date	default
Pricing date	default
Payment terms	ZB01
Incoterms	CPT (Carriage Paid To)
Material	M-17
Order quantity	210
Sales Unit (SU)	PC

5. Choose .

Confirm possible warnings with .

6. Select the item and choose .

In the availability control you can see the confirmed delivery quantity.

7. Make a note of the Dely/Conf.Date.
8. You return to the overview screen, by selecting One-time delivery.
9. Choose .
10. Make a note of the order number.
11. Choose .
12. In the dialog box, choose No.

Delivering the Sales Order

Use

The ordered pumps are now available in the finished goods warehouse and can be delivered to the customer. The system posts a goods issue.

Procedure

1. Call up the transaction as follows:

Menu Path	Logistics ® Sales and Distribution ® Shipping and Transportation ® Outbound Delivery ® Create ® Single Document ® With Reference to Sales Order
Transaction Code	VL01N, LT03

2. Enter the following data:

Field	Data
Shipping point	1200
Selection date	Date of delivery proposal
Order	Your order number
From item	blank
To item	blank

3. Choose .
4. Select your item and choose Subsequent functions ® Create transfer order.
5. In the end document processing dialog box choose Yes.
6. Note the delivery number.
7. Enter the following data:

Field	Data
Warehouse number	012
Plant	1200
Delivery	default
Foreground / background	Background
Adopt pick.quantity.	2

8. Choose .

The system creates a transfer order for picking the delivery quantities. The option 2 (Adopt pick.quantity) has the effect that the goods issue posting for the delivery is done at the same time.

9. Choose .

Creating a Billing Document

Use

Finally, you create an invoice in sales and distribution. For this, you refer to the delivery of the 210 monitors.

Procedure

1. Call up the transaction as follows:

Menu Path	Logistics ® Sales and Distribution ® Billing ® Billing document ® Create
Transaction Code	VF01

In the field Document you can see the number of the delivery created beforehand. If this should not be the case, please enter the delivery number from the previous operation.

2. Choose .
3. Double-click on the billing item created.
4. Choose the Item partners tab page.

On the following screen, the system displays all partners of the document item.

5. Choose twice.
6. Choose .
7. Note the document number.
8. Choose .
9. Call up the transaction as follows:

Menu Path	Logistics ® Sales and Distribution ® Billing ® Billing Document ® Display
Transaction Code	VF03, FB03

The billing document number should appear in the billing document field.

10. Choose .
11. Select your item and choose Accounting.
12. In the dialog box choose Accounting document.

You can see the document overview. The document should look as follows:

Debit 2145 CompuMax GmbH AN 340,016.88

Credit 800002 Sales revenues - do AN 293,118.00

Credit 175000 Output tax AN 46,898.88

13. Choose .
14. Choose .
15. Choose until the overview tree appears.

Incoming Payment with Bill of Exchange

Use

The customer pays his invoice by way of a bill of exchange. In the following scenario you post this bill of exchange and clear the open item in this way.

Procedure

1. Call up the transaction as follows:

Menu Path	Accounting ® Financial Accounting ® Accounts Receivable ® Document entry ® Bill of exchange ® Payment
Transaction Code	F-36

2. Enter the following data:

Field	Data
Document date	Current date + 14 Days
Posting date	Current date + 14 Days
Document type	DZ
Period	Current period
Company code	1000
Currency/ rate	EUR
Transaction to be processed: Incoming payment	Select
PstKy	09 (Special G/L credit)
Account	2145
Sp.G/L (special general ledger-characteristic)	W

By choosing the special G/L account the system knows that a bill of exchange is to be posted on a separate entry screen. Simultaneously the system posts automatically to the special general ledger determined by the special general ledger characteristic.

3. Choose .

To skip any warning messages, choose .

4. Enter the following data:

Field	Data
Amount	340,016.88
Due on	current date + 90 Days
Issue date	current date
Planned usage	D (discounting)
Drawer	address data of your company code
Drawee	address data of customer 2145
Domicile	Address of your bank, you are to put the bill of exchange to
Cent.bnk loc	Important for the rediscountability of the bill of exchanges. If the bank entered in the field domicile is on a central bank location already, you do not have to make an entry
Discount rate	10

5. Choose .

The number of discount days is calculated from the difference between issue date and due date (78 days in this example).

6. Choose Process open items.
7. Enter the following data:

Field	Data
Special G/L ind	W
Automatic search	Select

8. Choose Process open items.
9. If the Proposal for clearing dialog box appears, choose Accept.



Note that the cash discount has to be deactivated. Otherwise choose Disc. (Deactivate discount).

10. Position your cursor on the gross amount and choose Items (Activate Items).
11. Choose Document ® Simulate.

The Bill of Exchange Payment: Display Overview screen appears, where you can see a posting with 6 items.

Example of posting:

Item	PK	BusA	Acct no.	Ammount in EUR	Tax
1	09W	7000	2145	340,016.88
2	50		275100	7,367.03-	1,178.05
3	50		275300	2.56-	0.41
4	03		2145	8,548.72
5	15	7000	2145	340,016.88-
6	50		175000	1,179.13-

12. Double-click on the first item.

You now see the bill of exchange in detail. In the General ledger field you see that the bill of exchange is posted to the differing reconciliation account 125000.

13. Choose .
14. Note the document number.
15. Choose .
16. In the Exit Editing dialog box, choose Yes.

How to Printing the Charges for a Bill of Exchange

Use

After the bill of exchange charges have been posted to the accounts receivable account and the respective revenue accounts, the system automatically creates a correspondence requisition for the bill of exchange charges. After requesting the correspondence, you can print the requested correspondence and send it to your accounts receivable.

Procedure

1. Call up the transaction as follows:

Menu Path	From the Accounts receivable node, choose Account ® Correspondence ® Request
Transaction Code	FB12

2. Enter the following data:

Field	Data
Company code	1000

3. Choose .
4. Position your cursor on SAP07 and choose .
5. Enter the following data:

Field	Data
Company code	1000
Document number	Your document number
Fiscal year	current year

6. Choose Continue.

In the status bar the system dislplays the message that the bill of exchange charges statement was requested.

7. Choose .
8. Call up the transaction as follows:

Menu Path	From the Accounts receivable node, choose Periodic Processing ® Print correspondence ® As per requests
Transaction Code	F.61,SP01

9. Enter the following data:

Feld	Data
Company code	1000
Date of request	Current date

10. Choose .



Note: If the system displays a dialog-box with the message XX Correspondence requests carried out were deleted, confirm it with .

The correspondence requests dialog box appears with the message that XX correspondence requests were selected.

11. Auf die Frage, ob Sie diese Anforderungen ausgeben möchten, antworten Sie mit Ja.
12. Note the spool number.
13. Choose System ® Services ® Output controller.
14. Choose the Spool-requests tab page and enter the following data:

Field	Data
Spool request number	Your Spool request number

15. Choose .
16. Select your Spool request and choose .

You now see your bill of exchange charges statement.

17. If you want to print it, choose .
18. Select your order and choose .
19. Choose until the overview tree appears.

Bill of Exchange Usage (Discounting)

Use

The bill of exchange will now be forwarded to the bank for refinancing (discounting). In the following scenario, you post the bill of exchange usage (manually) as soon as the bill of exchange amount is credited to your account. The incoming money is posted to the account and the bill of exchange charges are posted to the respective expense account. The reverse posting is done by the system automatically. This posting is made to a bill of exchange liability account (bank sub-account).

Procedure

1. Call up the transaction as follows:

Menu Path	From the Accounts receivable node, choose Document Entry ® Bill of Exchange ® Discounting
Transaction Code	F-33

2. Enter the following data:

Field	Data
Document date	current date + 2 months
Company code	1000
Currency/ rate	EUR
Trading part.BA
Usage	Discounting
Value date	current date + 2 months
Bank account	113100
Amount	337,180.91
Bank charges (charges + discount charges)	2,835.97



The amount of 337.180,91 corresponds to the credit memo on our current account. It is calculated from the initial sales order value (340.016,88) less the bill of exchange charges from the bank (2,50) and the discount interest (2.833,47). The bank deducts discount interest of 2.833,47 EUR because we present the bill of exchange 30 days prior to the due date.

3. Choose Select Bill of Exchange.

To skip any warning messages choose .

4. Enter the following data:

Field	Data
Document number	Document number of the bill of exchange
Fiscal year	Current year

5. Choose .

The system displays the Document Overview. The document should look as follows:

001 40 0000221000 discount charges 2,835.97

002 40 0000113100 Dte Bank (domestic) 337,180.91

003 50 7000 0000113107 DteBk (bill of exc) 340,016.88-

6. Choose .

The system displays a message that the document was posted.

7. Choose .
8. In the dialog box choose Yes.

SAP Reverse Contingent Liability

Use

The expiration day and the country-specific protest period have now expired so that you can cancel the bill of exchange liability. You have no recourse liability any more (bill of exchange liability).

With the help of the reverse contingent liability you clear the open item on the accounts receivable account.

Procedure

1. Call up the transaction as follows:

Menu Path	From the Accounts receivable node, choose Document Entry ® Bill of Exchange ® Reverse contingent liability
Transaction Code	F-20

2. Enter the following data:

Field	Data
Document date	Due date
G/L account	125000
Usage	Discounting
Due by	End of the due period
Customer	2145

3. Choose Edit Line Items.

To skip any warning messages, choose .

The selected items are displayed.

4. Position your cursor on the item you want to select.
5. If the item is not activated, choose On/Off.
6. Choose Document ®
Post.
7. Choose .
8. In the dialog box, choose Yes.