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Former Member

Bill of Exchange Discounting

Hello Experts,

my client want a Bill of Exchange Discounting .

So if u have some conguration and user t code.

Thanks

j

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4 Answers

  • Best Answer
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    Former Member
    May 20, 2009 at 09:17 AM

    Hi

    You can create the special GL indicator for the Bill of Exchange. (assign BOE Receivable A/c)

    Then Go to OBYH --> Define Accounts for Bill of Exchange transactions.

    Double click on Bank Discount Charges (BDS). Define "Bill Discounting Charges A/c".

    Go to SPRO > Fin. Acc (new) > Bank Accounting > Bus Transactions > BOE transactions > BOE Receivable > Present BOE Receivable at Bank > Define Bank Subaccounts

    Assign GL of "BOE Receivable - Contingent Liability A/c" in Discounting usage.

    End User Transactions:

    FB70 Invoice Booking

    F-36 To record the receipt of Bill of Exchange

    F-33 or FBW3 Discounting of Bill of Exchange

    F-20 or FBW4 Reverse the bill liability on actual collection by bank

    I hope this will clarify...

    Regards

    Kapil

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    • Former Member Former Member

      hi

      You cannot change a normal account to reconciliation account retrospectively.

      You will have to create the NEW reconciliation account and will have to replace the earlier account.

      While creating the reco account, tick the "open item management" field.

      Then do the full cycle again.

      Revert back in case of doubt.

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    Former Member
    May 20, 2009 at 07:03 AM

    Hi Jemes,

    The steps for Bills of Exchange Discounting is as follows:

    1 Creation of 3 GL Accounts

    a. Bills of Exchange Receivable A/c (Alternative Recon A/c) for Customers under Assets

    b. Bank Bills Discounting A/c with Open item Management flagged under Liabilities

    c. Discount Given A/c under the head Expenses

    The first 2 accounts are Balance Sheet accounts and the last one is the P&L A/c

    2. Define Alternative Reconcil.Acct for Bills/Exch.Receivable TCode OBYN. there you define the Alternative Reconciliation Account for B/E Receivable against the Special GL W.

    3. Define Bank Subaccounts TCode OBYK. There you define the Bank Sub Account for Bills Discounting.

    4.Assign the Discount Given account for automatic postings TCode OBXI

    Once you do all these configurations, the flow of transaction would be as follows:

    1. Post Customer Invoice. F-22

    Customer A/c Dr.

    To Sales A/c

    2.Bills of Exchange Payment F-36

    Customer A/c Dr. (Spl GL B/E Receivable A/c)

    To Customer A/c Normal

    3.Bill Discounting F-33

    Bank A/c Dr

    Discount Given A/c Dr

    To Bank Bills Discounting A/c

    4. On the due date if the bill is honoured, you have to reverse the contingent liability. TCode F-20

    Bank Bill Discounting A/c Dr

    To Customer A/c Dr. (Spl GL B/E Receivable A/c)

    Hope this helps you....

    Regards,

    Sreekanth....

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    • Former Member

      Hello Sir,

      Thanks for quik reply.

      I have to create 3 GL

      at third step

      a) Bank Ac b) Discounting c) SGL ID- W d) Customer Recon Ac e) bank sub ac for liab.

      which gl i have to maintain in (OBYK ) which GL BANK ac , Customer main recon ac or Alternative Recon A/c , Bank Sub Account.

      wating for reply

      thanks

      J

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    Former Member
    May 20, 2009 at 08:49 AM

    Hi Jemes,

    Say for example, you have following accounts:

    1000 u2013 Normal Recon a/c for Customers

    1100 u2013 Special GL Recon a/c for customers

    1200 u2013 Bank A/c

    1300- Bills Discounting A/c

    1400- Discount Given A/c

    In OBYN you have to link your alternative recon a/c against the spl GL W

    It looks like this.

    1000 u2013 1100

    In OBYK you should link your normal Bank a/c in which you receive the amount to your Bills discounting a/c

    It looks like this

    COA 1200 Discounting W 1000 1300

    In OBXI, you will give the account for discount given

    It looks like this

    1400

    Hope this helps youu2026.

    Regards,

    Sreekanthu2026

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    Former Member
    May 22, 2009 at 10:58 AM

    Thanks for coopration.

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    • Former Member

      About bills of exchange concept in Accounts Payable.

      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, m1 and m2. 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.

      Define Alternative Accounts for Bil/Exch receivables

      T-code (OBYN)

      Financial Accounting

      General Ledger Accounting

      Bank Accounting

      Business Transactions

      Bill of Exchange Transactions

      Bill of Exchange Receivables

      Post Bill of Exchange Receivables

      Define Alternative Acct for BE receivables

      Recon A/C: Normal Reco Acount

      Special GL Account: Special GL Account for recording Bill of Exchange Transaction.

      Define bank sub accounts

      T-code (OBYK)

      Financial Accounting

      General Ledger Accounting

      Bank Accounting

      Business Transactions

      Bill of Exchange Transactions

      Bill of Exchange Receivables

      Present B/E receivables at Bank

      Define Bank Sub Accounts

      Define B/E Payment Period (Protest Period)

      T-code (OB86)

      Financial Accounting

      General Ledger Accounting

      Bank Accounting

      Business Transactions

      Bill of Exchange Transactions

      Bill of Exchange Receivables

      B/E receivables: Reverse Contingent Liab

      Define B/E Payment Period.

      FOR POSTING THE TRANSACTION RELATING TO B/E

      For Receiving the B/E from customer

      (F-36)

      Financial Accounting

      Account Receivables

      Document Entry

      Bill of Exchange

      Payment

      For Discounting theB/E with the Bank

      (F-33)

      Financial Accounting

      Account Receivables

      Document Entry

      Bill of Exchange

      Discounting

      For Reversing the Contingent Liabilities

      (F-20)

      Financial Accounting

      Account Receivables

      Document Entry

      Bill of Exchange

      Reverse Contingent Liability