Bill of Exchange Discounting

[Former Member]

Hello Experts,

my client want a Bill of Exchange Discounting .

So if u have some conguration and user t code.

Thanks

j

[Former Member · Accepted solution]

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

[Former Member · Accepted solution]

Hello Sir,

Thanks for quik reply.

I have face one error in T code: F-20

Reverse bill liability by T-code f-20 hitting error ""Due by" date is in the future

Message no. F5478

Diagnosis

If the "due by" date is in the future, items where commitments still exist are also cleared.

Procedure

Check whether you have entered the date correctly.

Plz reply soon

thans

J

Edited by: Jemes on May 20, 2009 11:42 AM

[Former Member · Accepted solution]

Hi Jemes,

While discounting the bill in TCode F-33, you would have given the Due Date for the bill to get mature.

So, you should execute the TCode F-20 on or after the duedate which you have given in F-33.

Hope you understand and this helps you....

Regards,

Sreekanth....

[Former Member · Accepted solution]

Hi

Give the GL account of BOE Receivable A/c

Select usage as Discounting

Give proper due date in 'Due by' field.

Then it will give u open BOE items and you can select the BOE which you want to reverse.

In case of doubt pls revert back

Regards,

Kapil

[Former Member · Accepted solution]

Hello SIR,

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)

when i giving Bank Bill Discounting gl

that time system gives erro:

Account 16018501 in company code 1000 is not a reconciliation account

Message no. F5355

Diagnosis

G/L account 16018501 in company code 1000 which is to be updated when posting to the customer or vendor is not defined as a reconciliation account.

Procedure

Depending on the cause of the error you can

change the master record of the above-mentioned account and mark it as a reconciliation account

change the customer or vendor master record and enter a different reconciliation account there

for special G/L transactions, change the allocation of reconciliation accounts when configuring special G/L transactions.

When i am giving gl field Alternative Reconcil.Acct for Bills/Exch.Receivable

that time system give erro:

No due items exist at the key date

wating for reply

thanks

j

Edited by: Jemes on May 20, 2009 12:14 PM

[Former Member · Accepted solution]

Hi Jemes,

In F-20, Under bills of exchange selection, for GL Account you have to give the GL for bills discounting account (1300 in my example) and useage as Discounting and in my example, account 1000 and 1100 should be defined as customer reconciliation accounts.

I think you have not defined the account 1100 as customer reconciliation account. Check it out.

Hope this helps you....

Regards,

Sreekanth....

Edited by: VENKATA SREEKANTH on May 20, 2009 12:30 PM

[Former Member · Accepted solution]

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.

[Former Member]

Thanks for coopration.

[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

[Former Member]

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

[Former Member]

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....

[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