BILL DISCOUNTING
Fund based limits
(Money will be given physically by the bank)
|
Non fund based limits
(Money will no be given physically by the bank to the company)
| |
1. Cash credit
|
Local Sales order
|
1. Bank Guarantees (BG)
|
2. Packing credit
|
Export sales orders
|
2. Letter of credit (LC)
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3.Bank overdraft
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4.Bill discounting
|
Bill discounting mechanism AML
Sale 500000 on 12.11.2008
Term of payment –30 Days Credit
AML Discounts the bill
With the bank
|
Bank will charge 30 days
|
On due date, bank will collect
From customer
|
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Customer makes the customer does not make the
payment to the bank Payment to bank liability to AML
No liability to AML Liability to AML
Contingent liabilities
Liability is uncertain
Year end: This is shown in notes to accounts –Under contingent liabilities
Bills discounted with bank
Normal Accounting
|
SAP Accounting
|
A) Incase of sales
Customer A/c Dr
To Sales
|
Customer A/c Dr
(Sundry debtors)
To Sales
|
B) Bill of exchange payment
- No entry -
|
Customer special GL (W) Dr
(Sundry debtors bill of exchange)
To customer a/c with clearing
(Sundry debtors)
|
C) Bill discounting
Bank current A/c Dr
To Bank bill discounting
|
Bank current A/c Dr
To Interest A/c
To Bank Bill discounting
|
D) Report view customer wise /BIllwise due date wise/Bankwise out standings available in SAP
| |
E) Reverse contingent liability
Bank bill discounting Dr
To Customer
|
Bank bill discounting (with clearing) Dr
To Customer special GL(W) with
clearing
(sundry debtors will of exchange)
|
Presentation in Balance sheet:
Sundry debtors=Sundry debtors
Sundry debtors Debit
(Bill of exchange) } Net Zero
Bank bill discounting Credit
Or
Don’t plot sundry debtors bill of exchange and bank discounting in balance sheet-It is required only for notes to accounts.
Customer A/c SBI bill discounting
Normal items OP BAL 300000
A) 100000 B)100000 E)100000 C)100000
----------
400000
Special GL
B)100000 E)100000 300000
Limits with banks: SBI IDBI
Bill discounting limit 5000000 2000000
Already discounted 3000000 2000000
------------- ------------
Limit available 2000000 0 =======
Bill discounted as per C 1000000
-----------
Limit available 1000000
Payment by customer as per E 1000000
-----------
Now limit available 2000000
======
Creation of 2 GL masters
Sundry debtors (Bill exchange under current assets, loans & advances.
SBI bill discounting Secured loans
Fund based limits and non-fund base limits First change on current asset and second change on fixed assets.
Creation of GL account (FS00)
Give the GL account no. :200111
Company code :AML
Select with template
Give the GL account no.200110 Sundry debtors
Company code :AML
Enter
Change short text to sundry debtors Bill of Exchange
Change GL account long text to sundry debtors (Bill of exchange)
Other fields are common
Select save button or Ctrl+S
GL account no. :100302
Company code :AML
Select with template with button
Give the GL account no.100300 SBI Rupee Term loan
Company code :AML
Change short text and GL account long text to SBI bill discounting
Select control data tab
Select open item management check box
Select create /bank /interest tab
Select post automatically only check box
Save
Link between sundry debtors and sundry debtors bill of exchange
Path:SPRO-Financial account-Bank account –Business transactions-Bill of exchange transactions-Bill of Exchange receivable-Post bill of change receivable-Define alternative reconcile –Actual for Bills/Exchange receivable (Tr code is OBYN)
Double click on special GL indicator :W (Bill of Exchange receivable)
Give the chart of accounts :AML
Enter
Reconciliation account :200110
Special GL account :200111 Sundry debtors (Bill of exchange)
Save
Save in your request
Link for Bank current account, Sundry debtors Account and bank bill discounting account
Path: up to the bill of exchange receivable at bank-Define bank sub accounts(Tr code is OBYK)
Select new entries button
Chart of accounts :AML
Bank account :200105 SBI current account
Usage select discounting special GL indicator :W
Customer reconciliation account :200110(sundry debtors)
Bank sub account for liability :100302 (SBI bill discount)
Save
Press enter to save in your request
END USER AREA
Sales invoice posting (F-22)
Give the document date :Today’s date
Type :DR
Company code :AML
Select posting key :01
Account no. :6600001
Enter
Amount :100000
Business area :AMLH
Payment terms :Select NT 30 Net 30 (30 days credit)
Text :sales invoice posting
Posting key :50
Account :300000 Sales account
Enter
Ignore the warning message press enter
Amount :*
Business area :AMLH
Text :+
From the menu select document –Simulate and save
Bill of exchange payment:
Path :Accounting –Financial accounting- Accounts receivable –Document entry-Bill of exchange –Payment (F-36)
Give the document date :Today’s date
Type :DZ
Company code :AML
Posting key :09 Customer special debit
Account no. :6600001
Special GL indictor :W
Enter
Amount :100000
Business area :AMLH
Text :Bill of exchange payment
Due on :14.12.2008 (30 days due date)
Placement usage :select discounting
Domicile :SBI
Control bank location :Main Branch, HYD
select choose open item button
select choose open item button
Select process open item button
Double click on receivable :100000
From the menu select document –Simulate and save
Note the document no.500003
Bill discounting:
Path :Accounting –Financial accounting- Accounts receivable- Document entry –Bill of exchange –Discounting (F-33)
Give the document date :Today’s date
Type :DA
Company code :AML
Bank account :200105 (SBI current account)
Business area :AMLH
Amount :95000
Text :SBI bill discounting
Posting key :40
Account no. :400400 Interest account
Enter
Amount :500000
Business area :AMLH
Text :+
Press select bill of exchange button
Doc no. :500003
Document –Simulate and save
Report to view customer wise bill wise, document wise and bank wise outstanding:
Path :Accounting –Financial accounting-Accounts receivable-Periodic processing –Bill of exclude processing –Korea-Bill of exchange management (Tr codes S_ALR_87012213)
Give the chart of accounts :AML
GL account :200111 Bill of exchange
Company code :AML
Special GL indicator :W
Usage :select D (Discounting)
Select discounted /Collected radio button
Execute
Select current layout button
Keep the fields due date, document no, customer received form, document data-Domicile.
Amount in local currency
Select copy button
Reverse contingent liability :
Path :Accounting-Financial accounting –Accounts receivable-Document entry- Bill of exchange –Reverse contingent liability (F-20)
Give the document date & Posting date :13.12.2008
Type :DA
Company code :AML
GL account :200111 (Sundry debtors bill of exchange)
Usage :Select discounting
Due by :31.12.2008
Customer :6600001
Select edit line items button
Ignore the all warning message and press enter
Select drop down button for command column
+ Set items to active
++ Set items is blocks to active
- Set items to inactive
- Set items in blocks to inactive
Customer made payment for 2,3 and 4 bills.
Bill No or or
–
2 + ++
3 +
4 + ++
5 -
Customer made payment for 1 and 5 bills
Bill no. or or
1 +
2 - -
3 -
4 - -
5 +
Command filed select +
Save
From the menu select document –Display
If bill is dishonored:
Contingent liability becomes actual liability base step E reverse contingent liability additional entry to be passed.
Customer account Dr
To SBI current account (Sundry debtors)
Dunning (Reminder)
If the customer does not make the payment as per terms of payment system will issue dunning letters.
We are not programmers we use system given dunning letter formats.
Dunning area:
Company code as a whole /Regional wise / location wise
Eg.Big companies
Separate marketing heads
For East For West For North For South
Only to his area customers.
Here we create each session as one dunning area .
Small companies –one marketing head for all the regions.
Company code will be the dunning area.
(Cash credit : Loan from bank and after sales we discharge the liability export sales order , packing credit loan from bank , bill discounting after sale)
Dunning levels type of letters
Maximum :9 levels
We are using :4 levels
Dunning intervals (Frequency) :10 days
Grace period :3 days
Eg: 1st Letter 2nd Letter 3rd Letter 4th Letter
Sale on 17.11.2008 after after after after
Payment terms 0001 20.11.2008 30.11.2008 10.12.2008 20.12.2008
Payable immediately
Dunning charges: For sending the letter we can collect dunning charges form the customer.
It can be level based / amount
Based
It can be fixed percentage amount
It will be shown only in the letter
It will not be posted the accounts
Define dunning areas:
Path :SPRO-Financial accounting-Accounts receivable and account payable-Business transactions –Dunning –Basic settings for dunning –Define dunning areas.
Select new entries button
Company code :AML
Area :Blank
Text :Dunning area to AML
save
Ignore the warning message press enter
Press enter to save in your request
Define dunning procedures:
Path :Up to dunning the path is same –Dunning procedures-Define procedures (Tr code is FBMP)
Select new procedure button
Dunning procedure :AML
Name :Dunning procedure for AML
Dunning interval in days:10
No.of dunning levels :4
Line item grace periods :3 days
Interest indicator :Select 01 standard item interest calculation
Select standard transactions dunning check box
Ignore the warning message press enter
Dunning texts button
Company code :AML
Select customer radio button
Enter
Select new company code button
Give the company code :AML
Enter
For company code :AML select separate notice per dunning level check box
Select back arrow two times
Select Yes button for the message to save date
Press enter to save in your request
Select dunning levels button
Select always dun check box for all the four levels
Select charges button (F6)
Give the currency :INR
Enter
Company code :AML
Select customer radio button
Enter
Open one more session with transaction code :FBMP
Double click on procedure 0001
Select dunning text button
Give the company code :0001
Select customer radio button
Enter
Come to the first session
Dunning level 1
From F150-Dunn -01
Dunning level 2
Select pagedown button (right side)
Dunning level 3
Form F150_dunn_02
Dunning level 4th
Form F150_dunn_02
Now select charges button
Give the currency :INR
Enter
Select back arrow
Save
Ignore the warning message press enter
Press enter to save in your request
Assign dunning procedure in customer master:
Path :Accounting-Financial accounting-Accounts receivable –Master records-Maintain centrally-Change (Tr code is XD02)
Give the customer account no. :660001
Company code :AML
Enter
Select company code date button
Select correspondence tab
Dunning procedure :select AML
Save
END USER AREA
Sale invoice posting (F-22)
Give the document date & posting date :10.11.2008
Type :DR
Company code :AML
Posting key :01
Account :6600001
Enter
Amount :1111
Business area :AMLH
Text :Sales invoice posting
Posting key :50
Account no. :300000 Sales account
Enter
Amount :*
Business area :AMLH
Text :+
From the menu Select Document –Simulate and save
Dunning run
Path: Accounting –Financial accounting-Accounts receivable Periodic processing-Dunning-(Tr code F150)
Run on :Today’s date
Identification :AML1
Select parameter tab
Dunning date :Todays date
Documents posted up to :Today date
Company code :AML
Customer :6700000
Save
Select back arrow
Select schedule button
Select start immediately check box
Output devise :LP01
Select schedule button
Go on press enter till we get the message ‘ Dun selection is complted’
Select dunning print out button
Select print button
Go on press enter till we get the message dunning print out is completed
Select dunning history button
Give your company code :AML
Execute (F8)
Keep the cursor on 1111
Select display dunning notice button
Keep the cursor on the document no.
Select print preview button
Go and see the customer master (XD02)
Customer :6600001
Company code :AML
Enter
Its updates automatically
Last dunned date :17.11.2008 and dunning level.
