Setup in banks

[karthik]

Hi,

Can anyone explain me about while defining bank accounts in payables or receivables, we have a receivables options. In that they have given a segments called Remitted Receipts,Factored Receipts and Short term debt.

I want to know wats the feature behind these three options and in wat level they are used. It will be appreciated if anyone explain with some examples

[ramu.parepalli]

While creating Bank Accounts in AR or AP we have Receivable Options in Banks Called Remitted Receipts, Factored Receipts and Short Term Debt.

Remitted Receipts : Remittance is a process which we follow in our regular business process i.e. Depositing a Negotiable instrument in a Bank. This feature in AR supports 2 types of Remittance Method i.e. 1. Standard and 2. Factoring

Receivables uses the payment method you assign to a receipt class to determine how to account for receipts you create using this receipt class.

1. Standard Remittance : Standard Remittance is depositing a Cheque/DD in a Drop Box for clearance of Cheque.

2. Factored Remittance : Factored Remittance is depositing a Cheque with a Banker at a Discounted Price. For Example, we are depositing a Cheque for Rs.10,000/-, the customer (only for liable customer) of bank requests to discount the cheque with the bank. Then the banker will Credit 9500/- (say) to your account. Rs.500/- is Cheque Disconting Charges.

3. Shortterm Debt : The amount Factored by Banker (say Rs.9500/-) is an uncleared Receipt/Cheque which is Short term Debt from Bank.


All the above 3 accounts codes in Bank (Receivable Options) are given to maintain the actual accounting entries.

Also request the group to Correct me if I am wrong.

Thanks & Regards,
Ram