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E1: 03B: How To Set Up and Process Drafts In EnterpriseOne Accounts Receivable (P03B602, R03B671, R03B672, R03B680) (Doc ID 760933.1)

Last updated on FEBRUARY 16, 2018

Applies to:

JD Edwards EnterpriseOne Accounts Receivable - Version XE and later
Information in this document applies to any platform.

Purpose

Overview of Accounts Receivable Draft Processing

Drafts are payment instruments that allow direct communication between the bank of the supplier and the bank of the customer. In most countries, a draft is a promise to pay a debt. The use of a draft for payment of obligations affects the legal nature of the underlying liabilities. Therefore, you must classify, track, and report drafts separately from other types of payments and obligations.

Many areas of the world use draft processing, although the payment instrument might be referred to as something other than a draft. For example, in Asia Pacific, the draft process is commonly used for post-dated checks. In the United States, it is used for credit card payments.

Both you, as the supplier, or your customer can originate a draft. Regardless of who originates it, you must enter the draft into the system (a process which is also known as draft acceptance), remit it for collection, and then record the collection of the money from your customer. Drafts can also be discounted and might have a contingent liability.

There are two types of A/R Drafts: Manual and Automatic Drafts. This refers to the customer's pre-authorization of a draft, rather than the methods used to enter/process the draft records.

Manual Drafts

Manual drafts are also called customer acceptance drafts because a customer must accept them before they can be remitted to the bank. The following types of manual drafts are available:


The system can distinguish drafts with only a bank name from those with complete bank account information. This is helpful because banks generally assess an additional fee to collect drafts if you do not provide account information.

The program used for this in JD Edwards EnterpriseOne is Customer/Supplier Drafts Entry (P03B602).

Automatic Drafts

Automatic drafts are also called preauthorized drafts because they do not require customer acceptance. You and your customer agree in advance that the customer will pay with a draft.

The program used for this in JD Edwards EnterpriseOne is Preauthorized Drafts (R03B671).

 

Scope

 This document is intended for users who are setting up or using the A/R Draft process in the EnterpriseOne Accounts Receivable module

Details

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In this Document
Purpose
 Overview of Accounts Receivable Draft Processing
 Manual Drafts
 Automatic Drafts
Scope
Details
 Steps to Process A/R Drafts
 Draft Origination
 Draft Acceptance
 Draft Remittance (Optional)
 Draft Collection
 Setup Requirements
 User Defined Codes (UDC) for A/R Drafts
 Setting Up Automatic Accounting Instructions (AAIs) for Accounts Receivable Drafts
 Setting Up Bank Account Information
 Processing Preauthorized Drafts
 Revise, Approve and Post A/R Drafts
 Revising Drafts
 Approving and Posting Accounts Receivable Drafts
 Deleting and Voiding Drafts
 Returning a Draft to Prior Status
References

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