- SAP Managed Tags:
In SAP, the Bill of Exchange (BoE) is a short-term financing tool that facilitates the discounting process within SAP FI.
The Bill of Exchange functionality can be utilized in three distinct ways.
Discounting: This process allows a Bill of Exchange to be sold to a bank before its due date. The bank charges interest and a handling fee for managing the transaction.
Collection: In this method, a bank or financial institution collects the payment on your behalf for a bill or invoice, ensuring you receive the due amount from the buyer.
Forfeiting: Forfeiting involves selling your Bills of Exchange internationally, which releases you from any liability or recourse once the bill is sold.
For more detailed information on the Bill of Exchange (BoE) processes, you can refer to the SAP Help documentation.
Prerequisites for Executing the Discounting Process:
To properly execute the discounting, the following settings need to be in place:
For BoE Invoices from the Bank:
- Special GL Indicator
- Reconciliation GL Account
To Record the Liability When Receiving the Amount from the Bank:
- Bank GL
- Liability - Short-Term Financing GL
- Charges GL
Scenario:
The business needs to record discounting charges on customer invoices that are discounted by a bank at a predetermined charge rate (e.g., 5%). This rate can be set in the backend through the SPRO configuration.
I will demonstrate this scenario starting from the customer receivables open item list, using transaction codes FBL5N or FBL5H (Customer Line-Item Browser).
These open items are ready for discounting in bank. To proceed, the business user will use transaction F-36 to mark the receivable open item with the Bill of Exchange indicator. This step indicates that the item is eligible for discounting through the Bill of Exchange process.
The customer will be assigned the special indicator 'W'. After this, the necessary details, such as the due date (e.g., 30th March 2025), will be entered on the next screen to complete the setup for the Bill of Exchange process.
Next, the invoices eligible for discounting will be selected using the open item selection on the following screen. This allows the system to identify and choose the specific invoices that will be processed for discounting.
After selecting the discounting invoices agreed upon with the bank, the accounting entries will be generated as per the details shown in the following screenshot. This step ensures that the appropriate financial postings are made in the system for the discounting process.
Presentation of BoE in Bank
Once the document is posted, it will be reflected in FBL5N with the special indicator 'W', indicating that the Bill of Exchange has been processed.
At the time of depositing the Bill of Exchange at the bank, SAP offers two methods for handling this process:
- Manual Process: Through transaction code F-33.
- Automatic Process: Using a Bill of Exchange presentation list, where charges and postings will be handled automatically.
In this case, I will choose the automatic posting option using transaction code FBWE, where the presentation list will be maintained.
Below is the screenshot of the presentation list.
In the FBWE screen, we select the reconciliation account that was previously maintained in the Special GL settings and the Bill of Exchange (BoE) configuration.
In the following screenshot, I will select the last invoice that is ready for discounting and assign the relevant house bank and account ID to it.
Please note that the Bank GL for Bill of Exchange must be mapped in the Manage Bank Accounts Fiori app under the Account ID for proper integration.
he discounting charges can be calculated automatically based on the settings defined in the SPRO configuration. These charges are determined by the predefined percentage rate set in the system, streamlining the process and ensuring accurate calculations.
SAP creates the summary of discounted and undiscounted bills with relevant Plan and available amounts.
Plan and available amounts are maintained in the SPRO settings.
Posting details will be maintained, here we can post the relevant charges in the GL account.
Batch Input is created, Session is now executed for accounting entries.
Document is posted with charges and short-term financing.
Reversal of BoE
Conclusion:
In conclusion, the Bill of Exchange process in SAP FI streamlines the management of receivables and payables by automating the creation, discounting, and settlement of transactions.
