Draft Processing

MAC-PAC software supports drafts as a payment type.  A draft can be a bill of exchange, bill of order, or unpaid/claimed back draft.  To use drafts, you must install the Draft Management module.  For more information, see the Draft Management User Manual.

A bill of exchange is created at the same time the invoice is created.  If the customer has not pre-approved the draft, the bill of exchange is sent with the invoice for customer approval.  After the customer confirms that a draft will be used to pay the invoice, the payment application is performed. 

At this time, the transaction is moved from Accounts Receivable into Drafts Receivable, and the open amount of the invoice is reduced by the amount of the draft.  A bill of exchange can be applied to an original invoice for which it was created or any other open item for the customer.  A batch application program allows you to automatically apply pre-approved bills of exchange to their corresponding invoices.

Procedures to Enter and Apply a Draft

With the following exceptions, the entry and application of drafts are the same as the entry and application of checks.

A bill of exchange must have the status of 'submitted to acceptance' in order to be entered as a new payment.

A due date must be entered if draft management is installed.  This date is only entered for a draft payment type and must not be entered for a clearing, write-off, or regular payment type.  The due date must be greater than or equal to the accounting date and payment date.

If the Corporate List option is chosen in the Payment Entry program, a bill of order will be the only acceptable draft payment type.  As with a check payment, if a bill of order draft payment is entered for a corporate customer, the payment number must not already exist for the customer whose open items are being covered.  On the Payment Application screen, you will have the ability to override the payment number if needed.

A bill of order and bill of exchange are both valid for non-corporate single customers and non-corporate multi-customers.  A bill of exchange is not valid for corporate customer payments.

A statement number may be entered for the draft if you want to limit the payment applications to a particular consolidated draft statement number.  This option can be used with the open item list selection.

If draft management is installed, bank name and address must not be blank if they are not needed for remittance or if payment type is not defined on the remittance procedure category F45.  For a bill of exchange, the defaults are retrieved from the Draft Master File.  For a bill of exchange or regular payment with remittance procedure defaults are retrieved from the Customer Master File (ARCUSTP).

If draft management is installed, remittance type must be blank for a payment type without a bank remittance procedure on Reference File category 344.  A remittance type must be entered for payment with remittance defined at the payment point on Reference File category F45; otherwise, this field must be blank.  If required, a remittance bank entry type must exist on Reference File category F49 for the remittance type/payment type combination.  It defaults from Reference File category F45.