Draft

A document representing payment between a buyer and a seller. A draft is a promise to pay at an agreed upon date from buyers that sellers take to their bank and deposit. The seller's bank will then either transfer the money from the buyer's account to the seller's account on the date the draft is due (draft due date), or the seller may negotiate with the bank for early payment minus a discount fee.

A Customer Draft is a draft issued by the seller to the buyer. In France, a customer draft is called a "lettre de change" or a "traite." Once the buyer signs the draft, it is accepted. Once the seller takes the draft to the bank for payment, it is remitted.

A Vendor Draft is a draft issued by the buyer to the seller. In France, a vendor draft is called a "billet à ordre."

There are two types of drafts in Accounts Payable:

• Standard draft: The vendor expects to receive a draft from the buyer (Service Management user). This draft is created through the system and sent to the vendor.
• Incoming draft: The vendor issues a draft to the buyer; that is, the Service Management user (buyer) receives the draft and manually inputs the information from the draft into the system.