Overview of Bills Receivable Remittances

Remit bills receivable to your remittance bank or other financial institution to initiate the collection process from your customers. Before remitting to a bank, you must create, review, and approve the bills receivable in a remittance batch.

You can create these types of bills receivable remittances:

• Standard remittances: You remit bills receivable to your bank, and the bank manages the collection process. On the bill receivable maturity date, the bank collects payment in full from your customers and transfers the funds directly to your bank account, less any fees or other charges. With standard remittances, you bear the financial risk of customer default.

• Factored remittances: You remit bills receivable as collateral in return for cash advances or loans from your bank. Receivables creates a receipt for the bill receivable upon remittance. If the bill receivable is factored with recourse, you bear the financial risk of customer default, and Receivables records a short term debt for the default risk. If the bill receivable is factored without recourse, the bank assumes the risk of customer default, and Receivables closes the bill upon creation of the remittance.

When you create a bills receivable remittance, the receipt class determines the remittance processes, and the bills receivable remittance receipt method assigned to the receipt class determines the accounting for the bills receivable. Receivables selects qualifying bills receivable for remittance and groups them according to the remittance bank assigned to each bill. You can specify additional selection criteria to limit the bills receivable that are selected for remittance.