Drafts and bills are issued to cover invoice claims. Drafts can be seen as preliminary and proposed groupings of invoice claims under one document number that has not yet been accepted by the debtor. Bills are a type of payment, or promise of a future payment that the debtor has accepted. Once a draft type document is accepted, it becomes a bill type document.
The following routines are used to handle drafts and bills:
- Work with A/R payment proposal
This menu item is used to create drafts and bills from invoice documents for debtors with A/R draft/bill payment modes. - Work with payment order reminders
This menu item is used to send reminders to debtors that have not accepted/signed the draft documents within the grace period. - Accept A/R payments
This menu item is used to accept draft type documents created in the automatic payment routine, and turn them into bill type documents. - Enter financial transactions, manual A/R payments
This menu item can be used to enter bills as payments for invoice claims, and to settle draft type documents that have not yet been accepted if the debtor pays the debt directly. - Work with A/R portfolio remittance and Create bank remittance magnetic media
These menu items are used to remit portfolio documents, e.g. bills, to the bank for encashment or discounting. - Close A/R portfolio
This menu item is used to close bills by expiration. - Work with A/R portfolio information
This menu item is used to maintain details for bills and also to cancel bills.
Accounting
The accounting for drafts and bills is carried out more or less automatically by the system. This section describes the different steps:
- Invoice is raised.
- A/R payment document is created.
- No accounting at all. This is mainly used for drafts that require acceptance from the debtor.
- A bank account (e.g., for direct debits), or a portfolio control account (for portfolio documents) is debited. The control account for the invoice document covered by the payment is credited.
- The A/R payment document is accepted (draft becomes a bill).
- Bill is paid by debtor (before remittance).
- Bill is remitted to bank.
- Remitted bill is paid by bank.
- Bill is closed by expiration.
- Draft/bill document is cancelled.
The control account for A/R invoices is debited based on the invoice document type. The contra accounting is made manually or automatically, depending on the rules set up for the invoice document type.
The accounting depends on how your payment modes and document types have been defined:
The portfolio control account is debited according to the rules set up for the portfolio type. The control account for the invoice document covered by the payment is credited.
A bank account is debited, automatically or manually, depending on the payment document type. The portfolio control account is credited.
The bank remittance control account is debited. The encashment or discounting control account is credited, depending on the remittance type.
The bank payment account is debited. The bank remittance control account is credited.
The enchashment/discounting control account is debited. The portfolio control account is credited.
If the bill has been paid when cancelled, the accounting for the currently used accounts are then reversed, and a reverse payment is created. This payment can be used to re-open the underlying invoice documents via the manual transaction entry routine, or be the basis for a new portfolio document.
If the bill is not yet paid when cancelled, the system will reverse the already created G/L transactions, update the portfolio entry and re-open the underlying invoice documents via the manual transaction entry routine, or be the basis for a new portfolio document.
Enquiries and printouts
- A/R portfolio enquiry – contains details and accounting information for all bills that have been entered.
- A/R transactions and balances – contains details and settlement information for all A/R transactions that have been entered.
- G/L transaction details – contains the G/L postings for all A/R transactions in batches that have not been closed.
- G/L transactions – contains the G/L postings for all A/R transactions that have updated the General Ledger. You can use the parameters document type and number for selection.
- A/R transaction list – displays details for all A/R transactions that have been entered. A number of sequence and selection parameters are available, to give you the list that is relevant for your needs.
- G/L transaction list – displays details for the G/L postings of A/R transactions. You can use the parameters document type and number for selection.
- A/R balance list – displays customer balances on different levels.