BILL OF EXCHANGE

[Former Member]

PLS DO THE NEEDFUL

DECRIBE BILL OF EXCHANGE

REGRDS

MAHESH

*ASIGN FULL MARKS

[Former Member]

HI

REFER BELOW LINK

<a href="http://help.sap.com/saphelp_45b/helpdata/en/e8/f0c1040a6911d294f200a0c929f4c9/content.htm">Bills of Exchange</a>

[Lakshmipathi]

Dear Mahesh

Under the check/bill of exchange procedure, the customer and not the vendor uses the bill of exchange for refinancing.

The chain of events is as follows:

1) The customer pays for goods with a check. At the same time, he draws a bill of exchange on which he is named as the drawee and the vendor as the drawer. He sends the check and the bill of exchange to the vendor.

2) The vendor signs the bill of exchange as the drawer and returns it to the customer.

3) The customer passes on the bill of exchange to his bank to be discounted. Although the bill of exchange is drawn on him, he uses it himself for refinancing: he is credited with an amount that he himself owes to his vendor. The bank credits him with the bill of exchange amount minus the charges and discount interest.

Thanks

G. Lakshmipathi