Accounting of bills

Accounting of bills is a form of Bank's lending to legal entities by purchasing bills prior the payment date on them with a discount for cash in order to obtain profit from the redemption of these bills in full amount. Accounting of bills is a credit transaction. Given the bill, the bank provides a term credit to the bearer of the bill.

A loan in the form of bills accounting is granted by money transfer to the current account of the bearer within the period established by the accounting agreement; the money transferred is the amount payable to the bearer of the bill.

The types of bills accounting include non-recourse accounting and accounting with a reverse; they differ from the regular accounting procedure by numbers and volumes of liability by the bearer of the bill.

Regular accounting of bills

The regular accounting of bills is a type of accounting when the credit amount of the bearer makes the full bill amount (face value and interest on interest-bearing bills). If the bill is not paid by the payer, the bearer must pay to the Bank the entire amount of the bill under the accounting agreement.

Advantages for the drawer of a bill (goods buyer):

  • A delay of payment for the provided goods by issuing a bill without the diversion of circulating funds.
  • A possibility of securitization of a pledge by one of the counterparts or by both parties.
  • A possibility of money saving on a pre-term redemption of a bill (redemption is below par).

Advantages to the bearer of a bill (goods seller):

  • A prompt receipt of funds for the delivered goods.

Accounting of bills with a reverse

Accounting of bills with a reverse is a type of bills accounting when the bearer of a bill gives the Bank the obligation to redeem the accounted bills before the deadline for their payment.

Advantages to the bearer of a bill (goods seller):

  • A prompt receipt of funds for the delivered goods.

Advantages for the drawer of a bill (goods buyer):

  • A delay of payment for the provided goods by issuing a bill without the diversion of circulating funds.
  • The pledge is secured by the counterpart – the seller of the goods.

Non-recourse accounting of bills

Non-recourse accounting of bills occurs when, according to the accounting agreement, the bearer is not responsible for paying the bill in full amount, though the bill is sold to the Bank's at the agreed price.

Advantages for the drawer of a bill (goods buyer):

  • A delay of payment for the provided goods by issuing a bill without the diversion of circulating funds.
  • A possibility of money saving on a pre-term redemption of a bill (redemption is below par).

Advantages to the bearer of a bill (goods seller):

  • A prompt receipt of funds for the delivered goods.

The holder of the bill, wishing to present the bill for accounting, provides the Bank with a package of documents similar to the documents package required for obtaining a bank credit.

Accounting of bills is carried out by the Bank on the basis of the accounting agreement concluded with the drawer.

The agreement can be concluded for a certain period (a general agreement on bills accounting) and / or for accounting of selected bills (a separate agreement on bills accounting).

Additional information: