Defining a Product

3.2.1.1 Defining a Product

The characteristics that you define for a product helps distinguish it from another. The entries that are passed, the messages that are generated and the processing of bills involving this product is determined by the characteristics that you define for it. Indicate characteristics like:

Table 3-1 Bills and Collections Product Definition - Field Description

Field	Description
Product Code	This is a Mandatory Field Specify the product code.
Product Description	This is a Mandatory Field Specify a product description for the product.
Product Type	This is a Mandatory Field An important detail in defining a product is to specify the type of product created. A Bill product that created in Oracle Banking Trade Finance Cloud Service is of the following types: Import Export Bills under Transferred LC The type of bill product created, determines the operations performed on the bill. On liquidation of the contract under import LC, pass the accounting entries to debit from an intermediary GL to which the proceedings of the export bills credited to the Nostro account of the second beneficiary bank.
Slogan	Specify a slogan for the product as required.
Product Group	Select the group to which the product is associated, from the option list provided.
Start Date	Specify the start date for the product.
End Date	Specify the end date for the product.
Remarks	Enter any remarks related to the product as required.
Operation	This is a Mandatory field This indicates the operation that is allowed for the bills linked to a product. The operation selected for the product is determined by the type of bill product defined (import, export, and collection). The operation type selected for the bill determines the type of accounting entries passed and the messages are generated. Select an operation from the option list available. The type of operation performed on a bill is represented, see:
Tenor Code	The tenor that you define indicates when the bills linked to the product paid immediately or after a Usance period. The bills linked to a product is paid either at: Sight – Select pay the bill immediately Usance – Select to pay the bill after a Usance period Multi-Tenor – Select to pay the bill in multiple tenors
Document	Draw the bill under an LC issued by the bank, either clean or documentary. If you indicate that bills under an LC process using the product, also indicate the type of LC indicating the drawn bill. The options available are: Clean - indicating that no documents are required to process the bills linked to this product. Documentary - indicate the documents needed for the processing the bills linked to this product.
Under Letter of Credit	The bills that you process at your bank, drawn under an LC issued at your bank or another bank. Indicate if the bills drawn under an LC is processed using the product you are creating
Reimbursement Claim	Check this option to indicate that the product is applicable for processing reimbursement claims. This field is enabled when you choose the operation as Payment, and the type specified as Import. Note: The system validates, if this check box is enabled for products with Tenor Code maintained as Multi-Tenor.
Change of Operation allowed	In addition to indicating the operation allowed for bills linked to a product, you have an option to indicate whether a change of operation allowed for the bills linked to the product.
Acceptance To Advance	Create a product with operation type Acceptance, also indicate that the bills, which are processed using this advanced product.
Acceptance To Discount	Creating a product with operation type Acceptance to indicate that the bills, which are processed using this discounted product.
Collection To Purchase	Creating a product with operation type Collection to indicate that the collection bills processed using this purchased product.
Discount To Collection	If you are creating an export bill product with operation type Discount, click here to indicate that discounted bills processed using this product booked for collection also. If you select this option, you should also maintain accounting entries for the events BCOL and LCOL. While processing a bill involving the product, you need to book a bill under Discount. If you change the Operation to Collection, the accounting entries passed and defined for BCOL. Liquidate the bill to account the entries defined and passed for LCOL. This operation type treated as a foreclosure and outstanding discount accruals completed unconditionally when the operation carried before the maturity date of a BC contract linked to the product. See the topic Define Discount Accrual Classes for more information on discount accruals.
Purchase To Collection	If you are creating an export product with operation type Purchase, click here to indicate that purchase bills processed using this product be changed to Collection also. If you select this option, you should also maintain accounting entries for the event BCOL and LCOL. This treated operation type is a foreclosure, and outstanding discount accruals completed unconditionally when the operation carried out before the maturity date of a BC contract linked to the product. See the topic Define the Discount Accrual Classes for more information on discount accruals. Table 3-2 Table 3-3
Acceptance To Forfaiting	If you are creating an export product of Bills under LC with Tenor as Usance indicate that the bills coming under this product is forfeited, by checking this option. This option will be available only if the selected operation for the product is Acceptance. The system will trigger the event FACP if the bill operation changes from Acceptance to forfaiting.
Discount To Forfaiting	If you are creating an export product of Bills under LC with Tenor as Usance indicate that a discounted bill coming under this product is forfeited, by checking this option. This option will be available only if one of the two cases is true: The selected operation for the product is Discount. The selected operation for the product is Acceptance with the change preference Acceptance to Discount checked. The selected operation for the product is Discount. The selected operation for the product is Acceptance with the change preference Acceptance to Discount checked. The system will trigger the event FDIS if the bill operation changes from Discount to Forfaiting. If the operation for an export bill with the set tenor Usance as Acceptance, then change the operation to Acceptance to Discount. Choose Acceptance to Discount to select one of the following operations: Discount to Collection Discount to Forfaiting On save of the product, the system will check whether the bill product was saved with the Forfaiting operations or not. If the product saved earlier with any of the Forfaiting operations, the system does not save the product. The process for changing a bill status is: Unlock the contract change the operation code Specify the limits tracking parameters for the changed contract
Collection to Transfer	Check this box to indicate that the operation for the contracts created under this product, change from Collection to Transfer. Do this operation only for Collection Bills.
Collection To discount	Check this box to change the operation from Collection to Discount. Partially financed LC Bill is booked under Collection and moved to Discount operation with partial Discount. Multi - tenor products payment operation is not supported. However, a multi-tenor contract is booked with collection operation and then liquidated when marked as payment.
Collection To CoAcceptance	The system will trigger the event BCAC if the bill operation changes from Collection to Co Acceptance. Liquidation of Co Acceptance bills will trigger LCAC. Co Acceptance commission components attached to the BCAC event while defining a product. If the Acceptance Commission also needs to be collected along with Co Acceptance Commission, then Acceptance Commission needs to attach the BCAC event while defining a product. See Table 3-4 Table 3-5 Table 3-6 Table 3-7 Table 3-8 Table 3-9 Table 3-10 Table 3-11 the for accounting entries of BCAC event with acceptance interest component with the collection method as Advance.
Acceptance To Free of Payment	Check this box to change the operation from Acceptance to Free of Payment and on change FOPY event to be triggered.
Collection To Free of Payment	Check this box to change the operation from Collection to Free of Payment and on change FOPY event to be triggered.
Acceptance To Coacceptance	Check this box to change the operation from Acceptance to Coacceptance and on change BCAC event to be triggered.
Coacceptance To Discount	Check this box to change the operation from Coacceptance to Discount and on change BDIS event to be triggered.

Table 3-2 Accounting entries - BCOL

Accounting Role	Amount Tag	Dr./Cr.
BC CUSTOMER	BILL_OS_AMTEQV	DR
BILLSPURCHASED/DISCOUNT	BILL_OS_AMTEQV	CR
CONT GL	BILL_OS_AMTEQV	DR
CONT OFFSET GL	BILL_OS_AMTEQV	CR
BC CUSTOMER	INT_LIQD	DR
RECIEVABLE GL	INT_LIQD	CR
BC CUSTOMER	PENINT_LIQD	DR
RECIEVABLE GL	PENINT_LIQD	CR

Note:

Last two entries of interest liquidation should be defined only for arrears type collection products Following are the accounting entries passed during LCOL:

Table 3-3 Account Entries - LCOL

Accounting Role	Amount Tag	Dr./Cr. Indicator
CONT GL	BILL_LIQ_AMTEQ	CR
CONT OFFSET GL	BILL_LIQ_AMTEQ	DR
BC CUSTOMER	BILL_LIQ_AMTEQ	DR
NOSTRO ACCOUNT	BILL_LIQ_AMTEQ	CR

For forfeited bills, BCOL entries should be defined with MRG_AMT_EQUIV tag instead of BILL_OS_AMTEQV. In LCON event, MRG_LIQ_AMOUNT should be used in place of BILL_LIQ_AMTEQ.

Table 3-4 Accounting entries - BCAC

Accounting Role	Amount Tag	Dr./Cr. Indicator
ACCEPTANCE CONT	BILL_AMOUNT	DR
CLFA CONT	BILL_AMOUNT	CR
BC CUSTOMER	<Component>_LIQD	DR
<Component>RIA	<Component>_LIQD	CR

Following are the corresponding accrual entries on ACCR event:

Table 3-5 Accrual entries on ACCR

Accounting Role	Amount Tag	Dr./Cr. Indicator
<Component>RIA	<Component>_ACCR	DR
<Component>INC	<Component>_ACCR	CR

Following are the Accounting entries of BCAC event with acceptance interest component and CoAcceptance interest component with collection method as Advance.

Table 3-6 Accounting entries on BCAC

Accounting Role	Amount Tag	Dr./Cr. Indicator
ACCEPTANCE CONT	BILL_AMOUNT	DR
CLFA CONT	BILL_AMOUNT	CR
BC CUSTOMER	<CoacceptanceComponent>_LIQD	DR
<CoacceptanceComponent>RIA	<CoacceptanceComponent>_LIQD	CR
BC CUSTOMER	<AcceptanceComponent>_LIQD	DR
<AcceptanceComponent>RIA	<AcceptanceComponent>_LIQD	CR

Following are the Accrual entries on ACCR:

Table 3-7 Accrual entries - ACCR

Accounting Role	Amount Tag	Dr./Cr. Indicator
<CoacceptanceComponent>RIA\	<CoacceptanceComponent>_ACC R	DR
<CoacceptanceComponent>INC	<CoacceptanceComponent>_ACC R	CR
<AcceptanceComponent>RIA	<AcceptanceComponent>_ACCR	DR
<AcceptanceComponent>INC	<AcceptanceComponent>_ACCR	CR

Following are the Accounting entry for CoAcceptance commission with the collection method as Arrears:

Event: ACCR

Table 3-8 Accounting entry - ACCR

Accounting Role	Amount Tag	Dr./Cr. Indicator
<Component>REC	<Component>_ACCR	DR
<Component>INC	<Component>_ACCR	CR

Following are the Accounting entry for CoAcceptance commission with the collection method as Arrears.

Event: LCAC

Table 3-9 Accounting entry - LCAC

Accounting Role	Amount Tag	Dr./Cr. Indicator
BC CUSTOMER	<Component>LIQD	DR
<Component>REC	<Component>LIQD	CR

Following are the Accounting entry for both the commission to be collected in Arrears:

Event: ACCR

Table 3-10 Accounting entry - ACCR

Accounting Role	Amount Tag	Dr./Cr. Indicator
<CoAcceptanceComponent>RE C	<CoAcceptanceComponent>ACCR	DR
<CoAcceptanceComponent>INC	<CoAcceptanceComponent>_ACCR	CR
<AcceptanceComponent>REC	<AcceptanceComponent>_ACCR	DR
<AcceptanceComponent>INC	<AcceptanceComponent>_ACCR	CR

Table 3-11 Accounting entries - LCAC

Accounting Role	Amount Tag	Dr./Cr. Indicator
BC CUSTOMER	<CoAcceptanceComponent>_LIQ D	DR
<CoAcceptanceComponent>REC	<CoAcceptanceComponent>_LIQ D	CR
BC CUSTOMER	<AcceptanceComponent>_LIQD	DR
<AcceptanceComponent>REC	<AcceptanceComponent>_LIQD	CR

Parent topic: Define the Bills and Collections Product Details