How many bills of exchange are sitting in your safe, and for how much?
The bills portfolio — bills of exchange, LCN, post-dated cheques — and their statuses, cross coverage of invoices, discounting with agio, the unpaid bill that reopens the invoice, and the twelve-month cost.
What you get
- An exact answer: how much paper is in the safe, and for how much.
- Receivables that handle bills of exchange correctly.
- The real cost of agio and returns over twelve months.
Transcript
In Morocco, a client often pays with paper: a bill of exchange, an LCN or a post-dated cheque. What sits in your safe is paper, not money.
Every bill shows up in the portfolio: on hand, at the bank or discounted, and then settled or unpaid.
The key idea: a bill does not pay the invoice. It moves the date the money is expected on. The invoice stays open, but it is no longer overdue. The payment is recorded only on the day the bill is actually honoured.
Coverage can be partial and crossed: one bill for three invoices, two bills for one. But a bill can never promise more than it carries.
Discounting: the bank advances the money less the agio, but the risk stays with you until the bill is settled. And in expected inflows the money counts once: a discounted bill does not come in again at maturity.
The bill comes back unpaid: the debt returns, and the invoice is waiting for payment again. If a payment had already been recorded, a negative entry reverses it and the invoice reopens. The bank charges are recorded on the bill. Nothing is erased.
And at the bottom, a number almost nobody tracks: what your paper portfolio cost you over twelve months, agio plus return charges.
How much paper is in the safe, and for how much: the answer is right there.