SUMMARY
This work will develop the most important aspects of the bill of exchange; its definition, the people involved, the moments it has and its characteristics. The objective we pursue with the completion of this work is to emphasize the intensification of the use of the Bill of Exchange, as a collection instrument, which helps the better circulation of goods and expedites all commercial procedures without immediate cash transfer. In modern times, these credit instruments have become an important tool for commercial transactions, since they are contemplated in the Commercial Code, which makes their collection possible.For the preparation of this research, we proceeded to the analysis of various sources of information that allowed its development in the clearest and most concise way possible, examples that contribute to its understanding are also presented.
Keyword:
- Bill of Exchange Acceptance Endorsement Guarantee.
The Bill of Exchange
In the Economic Resolution of the V Congress. 1997, it is stated that “… the introduction of discountable payment instruments, the stimulus and sanction of debtors through discounts or collection of interest for late payment, the improvement of commercial and financial management and other formulas to accelerate the turnover of money will be implemented, achieving a functioning of the banking and non-banking financial entities in accordance with these purposes… ”(1).
On the concept of bill of exchange, Tobar. 1969 states that “the Bill of Exchange is a written order, given by the creditor (drawer) to a debtor (drawee) to have to deliver to a defined person (payee) a certain sum of money, over time ”(2).
The Bill of Exchange, called in our country "money order", is a commercial document that contains a promise or obligation to pay a certain amount of money at an agreed due date. And it constitutes a written order, by means of which a person called Librador, orders to pay to his order or to the other person called the Taker or Beneficiary, a certain amount, on a certain date, to a third person called Librado <http: // www.monografias.com / jobs2 / changeletter / changeletter.shtml> (3).
Characteristics of the Bill of Exchange
As it is a formal document, its validity depends on the fulfillment of certain requirements:
- The designation of the place, day, month and year in which it is paid The time in which it must be paid The name and surname, business name or title of the person whose order is sent to make the payment The amount that the The drawee orders to pay, expressing it in effective currency. The name and surname, business name or title and address of the person or company in charge of the drawee. The signature of the drawer, his own fist or his attorney-in-fact, with sufficient power.
People involved
These can be divided into two groups.
a) Those that are essential for its improvement:
- Drawer (issuer): The most important of the obligations is to be the main responsible (the one who responds), first for the acceptance, and second, for the payment of the bill, in the event that the drawee does not accept it. Librado and Librado / Acceptor (the one who will pay): Regarding this Rebora. 2001 points out that "the drawee, as the complementary figure of the triangle, deserves an important distinction: the same can be done by the acceptor and thus, the principal obligated, who never becomes so" (4). Beneficiary: It is the one to whose order the payment of the sum ordered by the Drawer must be made. The name of the beneficiary or policyholder must be indicated in the letter. <; (5). Holder or taker: It is the final holder of the bill, who presents it for collection on the day of its maturity.
b) Those who are not: People who are likely to intervene in the letter, but whose intervention is not essential for perfection.
- Endorser: Any person who can collect the bill, could transmit it by endorsement. The endorser acquires all the rights of the policyholder or beneficiary. Endorsee: The new owner of the letter. Guarantor: Who guarantees the payment of the letter. Guaranteed: To whom the payment of the letter is secured.
Moments of the Bill of Exchange
- Acceptance: It is the act by which the drawee stamps his signature on the Bill of Exchange, committing to its payment, stating the date of said commitment.
Soberon. 2000, at the hearing convened by the National Assembly, he specified: “The act of acceptance of a bill of exchange implies the recognition of the liquid debt and if it is not honored at the time of its expiration or only partially, the creditor can present it before a notary and immediately take it to an executive judicial process ”(6).
- The endorsement: Les Ventes. 1941, states that it is “the act of transfer of property, that is to say, it is the way of transmitting in favor of another (endorsee) a letter issued to the order, thus making it appear on the back. The endorsement is used for the discount of the bills, for the collection management and for the payment of the debts to third parties. The ownership of the bills of exchange will be transferred by endorsement ”(7). The guarantee and its effects: The exchange guarantee is a written act by which a person undertakes to fulfill the payment obligation that, by reason of the letter, is the responsibility of the person guaranteed
According to Echavarri. "The Guarantee is a sign of weakness in the letter and the exchange instrument that needs that guarantee is sick, it asks for support on the crutches of other people's credit" (9).
- Protest: It is a notarial act that serves to prove that the lack of acceptance or payment of the bill of exchange has occurred. The notarial protest can be replaced by a statement signed by the drawee stating his refusal to accept or pay the bill.
Results applied to the RCB Company "Classification Society" (End of 1999)
In order to have an idea of the effectiveness of Bills of Exchange, we believed it necessary to begin the analysis in 1999, because it was this year that the study of a variant for the reordering of collections and payments throughout the country, which is nothing more than the instrument of the Bills of Exchange, through Regulations 56 and 64, which take effect in the year 2000.
Table 1.1: Statement of Accounts Receivable and Notes Receivable:
| Concepts | National Currency (MN) | United States Dollar (USD) | MN / USD |
| Up to 30 days | 137506.01 | 47615.76 | 185121.77 |
| Accounts Receivable Past Due | 242 257.92 | 268 829.95 | 511087.87 |
| Total Accounts Receivable | 379763.93 | 316445.71 | 696209.64 |
| Notes Receivable | 0 | 0 | 0 |
The company is in a critical situation, due to the fact that 73% of the total accounts receivable is aged, fundamentally influenced by the USD, where 85% of the total accounts receivable is past due.
- In MN 64% is aged of total accounts receivable. In USD 85% is aged of total accounts receivable. In MN / USD 73% is aged of total accounts receivable.
This was the situation of the company and the country in general at the beginning of the year 2000, so the introduction of Bills of Exchange, as an instrument in the reordering of collections was more than necessary, it was imminent.
(Closing 2001)
The company began to use the Bills of Exchange in August 2000, before Resolutions 56 and 64 of the BCC came into force. It was the first MITRANS company to use this instrument.
Table 1.2: Statement of Accounts Receivable and Notes Receivable:
|
Concepts |
MN |
USD |
MN / USD |
|
Up to 30 days |
178105 |
41280 |
219385 |
|
Accounts Receivable Past Due |
111240 |
50551 |
161791 |
|
Total Accounts Receivable |
289345 |
91831 |
381176 |
|
Notes Receivable |
68659 |
20878 |
89537 |
If we compare the results of this year with 1999 (as will be seen in detail later), if the bills of exchange do not exist, how will the results improve.
It is important to note that Regulation 56 of the BCC, which obliges all clients with debts prior to November to sign Bills of Exchange, enters into force on November 1, but it was not until mid-2001 that awareness of this regulation was made. because it was hard work to accept bills of exchange. In this way, the company undertook the task of updating all the contracts in the clause "Value and form of payment", in order to force them to sign Bills of Exchange.
Graph 1.2: Aging of Accounts Receivable.
- In MN 38% is aged of total accounts receivable. In USD 55% is aged of total accounts receivable. In MN / USD 42% is aged of total accounts receivable.
We thought it appropriate to make a brief analysis of how these indicators would have behaved in 2001, if bills of exchange had not been used as a collection instrument.
Table 1.3: Behavior of Overdue Accounts if there are no Notes Receivable:
|
Concepts |
MN |
USD |
MN / USD |
|
Overdue Accounts plus Notes Receivable |
179899 |
71429 |
251328 |
|
Total |
289345 |
91831 |
381176 |
- With the implementation of the bill of exchange, the reduction of the past due accounts as the% of aging was achieved. In MN, if the bill of exchange was not implemented, the aging% would be 62% and otherwise it would decrease to 38%. USD if the bill of exchange is not implemented, the aging% would be 78% and otherwise it would decrease to 55%. In MN / USD, if the bill of exchange was not implemented, the aging% would be 66% and otherwise it would decrease to 42%.
Comparative States
Table 1.4: Comparative status of the year 2001 with 1999.
| Concepts |
MN |
USD |
MN / USD |
|||
|
1999 |
2001 |
1999 |
2001 |
1999 |
2001 |
|
| Up to 30 days |
137506.01 |
178105 |
47615.76 |
41280 |
185121.77 |
219385 |
|
Accounts Receivable Past Due |
242 257.92 |
111240 |
268 829.95 |
50551 |
511087.87 |
161791 |
|
Total Accounts Receivable |
379763.93 |
289345 |
316445.71 |
91831 |
696209.64 |
381176 |
|
Notes Receivable |
0 |
68659 |
0 |
20878 |
0 |
89537 |
|
Real Income |
3325023.93 |
3660390 |
754669.87 |
800394 |
4079693.61 |
4460784 |
As a result of the introduction of bills of exchange, the aging of accounts receivable decreased, being favorable for the RCB.
- The aging of accounts receivable in both currencies decreases from 73% to 42%. In MN there is a decrease in the aging of accounts receivable from 64% to 38%. In USD there is a decrease in the aging of the accounts receivable from 85% to 55%. While sales in MN / USD increased by 9%, accounts receivable decreased by 45%.
In MN, sales increased by 10% and accounts receivable decreased by 24%.
In USD, sales increased by 6% and accounts receivable decreased by 71%.
- They were entered in MN / USD 381,090.4, in MN 335366.3 and in USD 45724.13 The behavior of past due accounts receivable is as follows: In MN / USD they decreased by 68% In MN they decreased by 54% In USD they decreased by 81%. In 1999, total accounts receivable represented 17% of the real income. In 2001 they represent 9%. In 1999 overdue accounts receivable represented 13% and in 2001 4%.
As a result of this analysis, we have that the Bill of Exchange at the end of 2001 was a guarantee of collection for the company since there was a decrease in total and past due accounts receivable, as well as the percentage of aging. So this year has been satisfactory for the RCB. All this was due to a good handling of the instrument in all its amplitude.
CONCLUSIONS
- The Bill of Exchange is a very important credit document to carry out legal transactions in any country. In Cuba, these transactions have their legal basis in the Current Commercial Code, which stipulates everything related to them. A bill of exchange becomes part of the Notes Receivable or Notes Payable, as the case may be and for which they have a very specific form of presentation, at the time of the transaction, when they are sent for collection or discount or when they are simply canceled. These credit documents are of great importance since they constitute a guarantee of recovery of the value of the provision of a service or the sale of some good, be it personal or real property; since through its issuance, the policyholder can resort to established legal sources,as already said in the Commercial Code, to make your payment effective.
BIBLIOGRAPHIC REFERENCES
1. Cuba. Communist Party of Cuba. Economic Resolution to the V Congress. 1998. Havana. Political Editor..
2. Tobar, J M. 1969. Encyclopedia of Modern Business, Volume 12.. Deusto Editions. 674p.
3. Google, (1997). The Bill of Exchange and the Promissory Note. Available at: <www.monografias.com/trabajos2/letradecambio/letradecambio.shtml> Consultation: date 11/09/04
4. Rebora Mier, J. 2001. Bill of exchange, Promissory note and other Credit Securities. 24h. Diploma work (in option to the degree of Bachelor of Accounting) - Open University. Mexico.
5. Cristo Devora, Y. 1997. The Bill of Exchange and the Promissory Note. Available at: <http://www.monografias.com/trabajos12/campa/campa.shtml> Consultation: date 11/09/04
6. Mayoral, M J. 2000. Two new instruments are in force to increase financial discipline. Granma (CU), August 26 ,: 5. 7. Les Ventes, Ch. 1941. Accounting Elements. Havana. 2nd Edition. Editorial CULTURAL Polygraphic Workshops. 431p.
8. Google, (2004). The Bill of Exchange. Available in:
9. Echavarri.. Cited by Rebora Mier, J. 2001. Bill of exchange, Promissory note and other Credit Securities. 24h. Diploma work (in option to the degree of Bachelor of Accounting) - Open University. Mexico.
10. Google, (2003). The Bill of Exchange, the Check and the Promissory Note. Available in:
