Renewal of Bill of Exchange

An issuance of new bill by drawer to drawee when drawee is not in a position to meet the first bill is called renewal of bill.

Sometimes, acceptor of a bill finds himself unable to meet his acceptance on the date. thus he could approach the drawer of the bill before the maturity date arrives, to cancel the recent bill and draw a brand new bill with extended date. The acceptor during this case can in fact have to pay interest for the extended period. therefore the cancellation of the old bill maturity reciprocally for a brand new bill (which includes interest) for associate extended period is named "renewal of a bill of exchange".

There are 2 additional ways to renew a bill of exchange:

    The acceptor pays interest in cash and a new bill is accepted equal to the number of the recent bill.

    The acceptor pays an area of the number of the bill in money and accepts a new bill for the balance and interest.

Endorsement of Bill of Exchange

When a bill of exchange is transferred to third party or creditor/account payable to settle his debt is called endorsement of bill.

The drawer or holder of the bill may endorse (transfer) the bill in favor of his creditor for the clearance of his own debts. A bill of exchange may be a "negotiable instrument" i.e. a document that is transferable by delivery abruptly to the party liable (drawee).

Discounting of Bills of Exchange

When holder of bill sells it to bank before due date to fulfill his needs against discount is called discounting of bill.

If you're a client of our Bank and for Your customers  have received bills of exchange with sure amounts and maturity dates for merchandise sold or maintained performed, you'll get operating funds by discounting bills of exchange at our bank before due dates.

Bill Payable

A bill of exchange from drawee point of view is called bill payable.

A bill payable could be a document that shows the amount owed for goods or services received on credit. samples of a bill payable include a monthly account, electricity bill, a bill for repairs or maintenance, the bill for merchandise purchased by a retailer on credit, etc. The supplier of the products or services is cited as the supplier or vender. Hence, the bill due  is also called an unpaid vender invoice.

Bill Receivable

A bill of exchange from drawer point of view is called bill receivable.

Accounts receivable are a legally enforceable claim for payment to a business by its customer/ purchasers for goods provided and/or services rendered in execution of the customer’s order. These are usually within the variety of invoices raised by the business associate with delivered to the client for payment at intervals an in agreement time-frame. assets are shown within the record as quality. it's one in every of a series of accounting transactions dealing with the charge of a client for merchandise and services that the client has ordered. These could also be distinguished from notes due , that are debts created through formal legal instruments referred to as dedication notes.

Advantages and Disadvantages of Grace Days

Grace periods will give some advantages. as an example, people that routinely are on time for his or her obligations, however due to occasional unforeseen circumstances are late on a rare occasion, will avoid a penalty for being late within the grace period and maintain their reputation for timeliness.

However, habitual procrastinators could come to look at the grace period as the actual point, and if, attributable to unforeseen circumstances, they're often late beyond that, they may complain about the applied penalty.

Grace Days

An extra three days which are given to drawee after due date for payment are called grace days.

A grace period may be a time past the point for an obligation during which a late penalty that may are obligatory is waived. Grace periods, which may range from a number of minutes to variety of days or longer, looking on the context, will apply in various situations, together with arrival at a job, paying a bill, for meeting a government or legal requirement, or in several other situations.

Advantages and Disadvantages

Grace periods will give some advantages. as an example, people that routinely are on time for his or her obligations, however due to occasional unforeseen circumstances are late on a rare occasion, will avoid a penalty for being late within the grace period and maintain their reputation for timeliness.

However, habitual procrastinators could come to look at the grace period as the actual point, and if, attributable to unforeseen circumstances, they're often late beyond that, they may complain about the applied penalty.