Bill of exchange
A bill of exchange, sometimes referred to as a BOE, is a payment agreement between a vendor and buyer. This agreement can take the form of a draft issued against a buyers bank account. The vendor can hold the draft until its maturity date or cash it early at a discounted rate. Bills of exchange are used most commonly in France and Spain.
Example
Tractor Cievo, a Spanish tractor company, purchased machinery parts from Ernesto Lopez Compania (ELC). The payment agreement between the two companies allows ELC to take money from Tractor Cievo's bank account in three months as payment for the parts. ELC submits a bill of exchange draft to Tractor Cievo's bank to be cashed on the maturity date or on an earlier, discounted rate if desired.