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  • What is Bill of Exchange(BOE)?
  1. Bill of exch. as payment medium with due date
  2. Bill of exch. as short term credit for customer
  3. Bill of exch. as flexible financing medium: Vendor can discount bill of exchange before due date dependent on financial requirements.
  4. The bill of exchange is usually created by the Accounts Payable/Accounts Receivable department of a company.
  5. Bills of exchange are handled as “Special G/L transactions” in the SAP System and a “Special G/L indicator” is updated in the respective bill of exchange line items, via which the special account determination is determined.
  • Types of BOE:
  1. Promissory note
    The customer is the creator of the bill of exchange and at the same time the drawee of the bill of exchange. He sends the bill of exchange to his business partner.
  2. Paper BOE, BOE payment request 
    The vendor sends a bill of exchange to his business partner to be signed. The customer sends it back on a certain date. The vendor can request that the bill be sent back-> Draft paper bill.
  3. Bank bill of exchange
    here exists a general agreement between business partners. The vendor creates a bill of exchange, enters the customer as beneficiary and sends this bill of exchange directly to the bank-à bank bill of exchange.

  • Senarios for example 1:

     ① Posting customer invoice (T-cd:FB01、FB70)

          Customer   1,000,000    /   Revenue   1,000,000

     ② BOE payment (F-36 individual processing, F110-> mass processing)

          BOE for Customer 1,000,000   /   Customer   1,000,000

     ③ Incoming payment(T-cd:F-28)

          Bank   1,000,000   /   Customer(BOE)   1,000,000

  • Senarios for example 2

     ①、 ② steps are the same with case 1.

     ③ BOE Presentation-> Bill of exchange presented to the bank(discounting or collection),Contingent liability (commitment set up) to the bank is set up, because the house bank only requires the money back from the vendor if the bill bounces.

          BOE bank subaccount 1,000,000 / BOE liability account 1,000,000

     ④ After bill due date, reversing contingent liability.

          BOE liability account 1,000,000 BOE for customer 1,000,000

     ⑤ Bank statement(import from FF.5)

          Bank account 1,000,000 BOE subaccount 1,000,000

     In case If bill of exchange bounced, update the failed payment transaction FBZG.

     Instead of mass processing in FBWE, individual process can be done in transaction codes T-cd:F-33/F-34/F-35=FBW3, F-20=FBW4.

  • Document display in SAP system for example 2:

①Customer invoice in T-code:FB70  

②BOE Payment in T-code:F-36

③BOE Presentation in T-code FBWE

④Reversing contingent liability in T-code:F.72

 Clearing BOE Liabilities

⑤Clearing bank subaccount manually or Via T-code FF.5

  • Account diagram with typical posting steps for customer
  • Main Customizing for customer’s BOE.
    1.IMG: Financial accounting(NEW) ->Bank Accounting ->Business Transactions ->Bill of Exchange Transactions -> Bill of Exchange Receivable
       - Present Bill of Post Bill of Exchange Receivable->Define Alternative Recon. Acct for Bills / Exch. Receivable(T-cd:OBYN).
       - Exchange Receivable at Bank-> Define Bank subaccounts(OBYK) 
       - Present Bill of Exchange Receivable at Bank-> Maintain house bank details (V_T012K_W-> Define the discount  account and Collection account for a house bank
       - Present Bill of Exchange Receivable at Bank-> Enter Bank assignment(V_T045F)   

2.IMG: Financial accounting(NEW) ->Bank Accounting ->Business Transactions ->Bill of Exchange Transactions ->Bill of Exchange Receivable
   - Present Bill of Exchange Receivable at Bank-> Define User-Specific Settings(V_TFBWE)
   - Present Bill of Exchange Receivable at Bank-> Assign Forms for Bill of Exchange Receivable(standard form F_SAPMFBWE_J10) (OT63)
   - Bill of Exchange Receivable: Reverse Contingent Liability-> Define Bill of Exchange Payment Period (OB86)

2 Comments

  1. Former Member

    Dear Gladys,

    Thank you for this helpful document,

    Dear Emrah,

    You will find in the attached useful document for SAP AR Check Portfolio Configuration & Transaction.

    Check Portfolio Configuration


    1. Your country must have ISO code "RT" for Turku

     C1.jpgC2.jpg 

     2. In company code globule setting OBY6 your company code must not have a document screen variantC3.jpgC4.jpg

     3. You need to maintain 2 special GL for account type D customer (FBKP -> Special GL)

    1. First one when receiving new customer check from F-36 W
    2. Second one when bank reject the customer check in FTR03 Bounced check at Bank Ex. S
    GL AccountDescriptionReconcile Account as CustomerSpecial GL Indicator for Account type DLine Item ManagementPost Auto. OnlyOpen Item Management
    114021Notes ReceivablesYesWMust BeNoNO
    114095Bounce AR Check Portf. (Rejec)YesSMust BeNONo

       C5.jpgC6.jpgC7.jpgC8.jpg

     4. Define new check Portfolios (Mani Check Portfolios - Bounced Check Portfolio

      1. SPRO ---> FI Acc New ---> Bank Acc ---> Business Trans. ---> BOE Trans --->BOE Receivable --->Post BOE ---> BOE Portfolios ---> Define BOE Portfolios.

    GL Account

    Description

    Reconcile Account as Customer

    Special GL Indicator for Account type D

    Line Item Management

    Post Automatic Only

    Open Item Management

    114021

    Notes Receivables

    Yes

    W

    Must Be

    No

    NO

    114095

    Bounce AR Check Portf. (Rejec)

    Yes

    S

    Must Be

    NO

    No

    194005

    Checks Presented to bank - Customer

    NO

    NO

    Must Be

    NO

    Yes

     

    C9.jpg

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    5. Define Form Names for Correspondence Print

    C11.jpg

    C12.jpg

    6. Configure Present Bill of Exchange to Bank

    GL Account

    Description

    Reconcile Account as Customer

    Special GL Indicator for Account type D

    Line Item Management

    Post Automatic Only

    Open Item Management

    194005

    Checks Presented to bank - Customer

    NO

    NO

    Must Be

    NO

    Yes

    1120011

    Sub Bank Account for incoming checks (checks Under Collection)

    NO

    NO

    Must Be

    No

    Must Be

     

     

     

    C13.jpg

    C14.jpg

    7. Maintain House Bank Details

    To connect the main bank account with sub-bank account (checks IN = checks under collection = incoming checks)

    C15.jpgC16.jpg

     

    8. Maintain Transaction Number Ranges

    C17.jpg

     

    C18.jpg

    9. Specify SAP Script Form

    C19.jpg

    C20.jpg

     

     

    ====================================================================================================================================================================================================================================================================================================================================================================================================================================================================================================================================================================================================================================================================================================================================

     

    Check Profile Transactions

    1. First Scenario Check accepted at bank and cleared
      1. Receive Customer Check F-36

              C21.jpgC22.jpg C23.jpgC24.jpgC25.jpg C26.jpg     

     b. Present Customer Check To Bank FTR0
    C27.jpgC28.jpgC29.jpgC30.jpg C31.jpgC32.jpgC33.jpg

     
    C. Check cleared at bankC34.jpgC35.jpg  C36.jpgC37.jpgC38.jpg C39.jpgC40.jpg  

     2. Second Scenario Check Rejected at bank and cleared

      1. Bounced Check at bank (Check Rejected)

    C41.jpg

    C42.jpg


    ***Check Portfolio Report FTR02

    C43.jpg

     

     

     

     

     

     

    Regards,

    Amr Elsherif

     

  2. Thank you for Sharing. That JPG are not are not opened. If possible kindly share the document to durgaprasaddokky@yahoo.in