Payment drafts-AR

A draft is a payment method that allows payment to be made from 30 to 120 days and, similar to an invoice, has a due date. Therefore, the draft is added in the customer risk until draft due date. Customer drafts are remitted on the due date before or in advance with a discount. Drafts can be printed by the company and sent to the customer for acceptance in the form of manual bills of exchange. Alternatively, they can be created by the customer and sent to the vendor in the form of promissory notes or post-dated checks, or both.

The bill of exchange process can also be automatic, where the process is like direct debit processing. Drafts are created by the vendor company on the customer account according to a non-acceptance process that is agreed in advance with the customer.