Not Due Drafts

At payment entry time, a customer's accounts receivable balance is reduced by the amount of the payment.  Since bills of exchange and bills of order payments are not truly paid until they are remitted, credit checking needs to include drafts which have not yet reached their due date.  Therefore when the accounts receivable balance is decreased for these payments,  the customer Not Due Drafts balance is increased accordingly.

In Order Processing and Accounts Receivable, the credit checking function includes not due drafts in the customer commitment at order point (order entry, blanket/backorder release), at automatic order release point, and at shipping/billing point.  The total accounts receivable amount is calculated by adding the customer's accounts receivable balance to either the customer's on-order amount or on-reserve amount, depending on the selection made on Reference File category 029, plus the not due drafts amount and the pending invoice amount.  The on-account balance and the customer's credit limit is subtracted from this amount to give the total accounts receivable.

At bank remittance creation time, the not due drafts amount is not automatically reduced by the amount of the remitted payment.  Rather, it is automatically recalculated every time either the Aged Accounts Receivable Report, Credit Exception Report, or Customer statements is run.  These programs recalculate the not due drafts amount by reading through all of the bill of exchange and bill of order payments for the customer.  The Draft Days Overdue Limit field on the Customer Master Maintenance - Draft Information screen (AR630S06) is added to the due date of each draft.  This extended due date is compared against the entered aging date and if this date is greater than the aging date, the draft amount is considered as part of the not due drafts balance.