Draft Collection

Draft collection consists of these steps:

  1. Your bank collects the funds for the draft from the customer's bank on the due date of the draft, or the bank informs you that it cannot collect the funds.

  2. On or after the due date, both you and the customer recognize the transfer of cash. When you run the program that processes draft collection, the system updates the pay status of the draft invoice record to show that it has been collected.

    This table shows the result of the collection process on the draft invoice record in the F03B11 table:

    Customer Number

    Doc Type

    Document Number

    Document Amount

    Pay Status

    Pay Instr

    7001

    R1

    10005

    10,000

    P

    2

  3. The system creates these journal entries, which you must post:

    • The system creates a journal entry to debit the bank account and credit drafts remitted.

    • If the draft is remitted with a discount, the system debits the bank account and credits the drafts remitted with discount account.

    • If the draft is remitted with contingent liability, the system debits the contingent liability account and credits the drafts remitted with discount account.