Best Answer

process and significance of bill discounting

User Avatar

Wiki User

10y ago
This answer is:
User Avatar
More answers
User Avatar


Lvl 1
3y ago

Bill discounting is a short term business loans using unpaid bills as security. You sell your unpaid bills to any financial unit and they pay you cash advances against your bill value. Once your bills are paid, you pay us back with a small interest fee.

Process of Bill Discounting:

Step 1:

The buyer receive the products from seller and sign a copy of invoice

Step 2:

The seller approaches to any financial institution to discount the invoice

Step 3:

The financial institution examine the invoice and credentials of buyer

Step 4:

Then, Financial institution pay the amount after deducting its charges

Step 5:

On due date the Financial institution will receive the entire amount from buyer.

and all this is done on a TReDS platform.

M1’s Trade Receivables Discounting System “TReDS” is an online exchange being set up under the approval of RBI to facilitate discounting of invoices and Bills of exchange on a PAN India basis.

For more information Search in Google : M1xchange

So, get yourself registered with M1xchange- India’s Leading TReDS platform today and stop worrying about your collections from customers and solve your liquidity issues. If you register before September 30th, 2020, you can register on their platform without any payment.

Its free !!

This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: What is the process of bill discounting?
Write your answer...
Still have questions?
magnify glass
Related questions

Bill discounting is done by banks in case of only?

demand bill

What is Bill Discounting?

M1 provides an online discounting and Trade Receivable Discounting System. It is a digital platform to support micro, small and medium enterprises (MSMEs) to get their bill financed at a competitive rate through an auction where multiple registered financers can participate. M1 Provide best Bill Discounting Facility.M1 is a leading global business process and technology management company, offering Trade Receivable Discounting Systems. We are the platform that serves as a transparent and quick medium for the small scale players to avail funds at cheaper rates through banking and factoring companies.To know more about us visit our website m1xchange

What is Discounting bill of exchange?

It means when holder of a bill needs money he can take the bill to bank where the bank will discount it and chargesome interest on that

What is discounting bill exchange?

It means when holder of a bill needs money he can take the bill to bank where the bank will discount it and chargesome interest on that

Discounting of bill of exchange?

i dont know but try to find it im srry if they :D

What is the difference between bill discounting and bill purchase?

This is a technical question and according to my opinion tenor is involved in the usance bill so we use the term of discounting whereas in sight bill no tenor is involved and we have to pay on sight or at one as per UCP 600 so we purchase the bill instead of discounting as it is payable on first demand. Saifullah Arif Soneri Bank Limited Dear, According to me, Demand Bill is payable on demand, supported by doccuments to title, so it is purchased at full value by bank, while discouting means at less than value and it is just like clean finance, because usance is other than demand, a period and uncertainity is involved, usually there are no document to title to goods, so bank keep high margin and pay less than face value.So we use Purchase of Bill in term of Demand Bill and Discouting of Bill in term of Usance Bill. Sheikh Junaid, Allied Bank Limited. According to me, In case of the bill purchase, the bill is purchased and that in case of bill discounting the bank is only financing against the said bill. The title of the bill would be transferred in favour of the bank in case of Bill purchase and whereas the title of the bill remains with the party in case of Bill Discounting. Further the responsibility of recovery of the amounts under the Bill purcahse would absolutely on the bank in case of Bill Purchase and the responsibility of recovery of the money under the bill discounting would be on the party. M.V Rao, Advocate, Hyderabad

Why do you discount a bill with a bank before it mature?

since the bill of exchange is a negotiable instrument, the holder of a bill can sell it to a bank, whenever should be stand in need of money before its due date. This is called discounting the bill. The discounting charge made by the bank is the interest on the amount of the bill for the unexpired period of the bill. Such charge is known as banker's discount. It is calculated at a certain rate of interest per Annam on the amount of the bill for the unexpired period.

What is the entry for bill disconting dishonour?

The entry for a bill discounting to be dishonored is made when the drawee refuses to accept or make payment on the bill. It is dishonored by non-acceptance or non-payment.

The process of finding the present value of some future amount is often called?

It is discounting. Good luck!

How can you discount letter of credit?

Discounting is an archaic term which now refers to the process of forfeiting or factoring the letter of credit

What are the Discounting and Non-discounting Criteria of Capital Budgeting?


How do you explain discounting of accounting policies?

Explain discounting of accounting policies