Definition of Acceptance: Calculation of Acceptance Bills and Conditions for Making Acceptances

Definition of acceptance – Some people are certainly familiar with the term “acceptance”. Where the term is one of the transaction terms at the bank which comes from the meaning of the word, namely justification or acceptance. The word acceptance in general here becomes its own concise meaning in a word to become a meaningful understanding of the concept and can be accepted to the fullest. That way, the best calculation results will be obtained.

So, what is the true meaning of acceptance? So, in the following, an explanation has been presented regarding the meaning of acceptance and several other things related to this term. Let’s find out the full discussion below.

Definition of Acceptance

The definition of acceptance is one of the important statements stating the ability to make and carry out payments smoothly through money orders that have been issued in an exporter and term manner and follow the maximum specified maturity. Thus, acceptance can also be said as acceptance in order to pay a number of parties concerned who are interested.

Meanwhile, acceptance receivables are bills from the issuing bank or issuing bank/issuer of letters of credit (L/C) against importers or buyers of goods that arise as a result of acceptance of drafts on the basis of a term Documentary Credit (SKBDN) that has been paid to the advising bank. as well as the seller’s or exporter’s bank. As well as bills from the recipient of the SKBDN (advising bank) to the issuing bank (issuing the L/C) after paying the acceptance to the beneficiary.

Acceptance obligations are debts and understanding Letters of Credit to other banks or advising or payment of L/C due to tomorrow’s payment and futures Documentary Letters of Credit (SKBDN) to porn exporters by the advising bank.

Apart from knowing the meaning of what is acceptance? Provisions that have been determined must definitely use the procedure by adding multiple signatures as proof of validation in the form of a money order. Then, do not forget that the acceptance must be proven by the fact of the word acceptance or other procedures that are still of a similar nature.

This means that the signature must be affixed precisely on the front page of the writing. If the signing of the money order is maximal, then the acceptance can be used optimally.

So, the accepted draft will look the same as the existing Promissory Notes and affidavits. So, in this way, these notes can be directly sold and traded with other parties concerned before the grace period on the specified maturity date, so that the legality of the notes will always be maintained.

In order for the acceptance transaction process to run smoothly, users don’t only need to know what an acceptance is. However, it is also mandatory to know about the procedures used in making the acceptance invoice. Where the billing will apply to activities in the form of business where the bank will be tasked with providing many financial guarantees in the form of letters of credit.

Calculation of Acceptance Bills

In business activities, for example in the previous discussion that banks provide financial guarantees, namely Letters of Credit, bank guarantees, and acceptances. In acceptances, there is a term called an acceptance bill. Where, acceptance receivables are claims that arise as a result of acceptances or statements of willingness to pay made on term notes.

Acceptances receivable are measured at amortized cost using the effective interest rate (EIR) less allowance for impairment losses. Meanwhile, acceptances payables are measured at amortized cost using the effective interest rate (EIR) method.

Types of L/C

L/C has several types which are categorized into 2 (two) categories. Well, what are they? Let’s pay attention to the discussion below carefully.

1. L/C Based on Its Nature

L/C based on their nature are grouped into 2 (two) groups, including:

a. Revocable L/C

Revocable L/C is an L/C which can be canceled or changed unilaterally by the buyer or importer or issuing bank data for approval or notification to the seller or exporter at the request of the applicant. The L/C is widely used with subsidiaries or branches of companies as well as between companies that already trust each other.

b. Irrevocable L/C

Irrevocable L/C is an L/C that cannot be changed or canceled without the consent of both parties and the issuing bank guarantees that it will pay for it as long as the exporter submits documents that match the L/C and submitted within the time limit specified in the L/C.

2. L/C Based on Payment

L/C based on payment consists of 4 (four) groups, including:

a. Sight Payment L/C 

Sight Payment L/C is an L/C whose payment is made when the drafts addressed by the beneficiary or seller are accompanied by other documents required for the L/C.

b. Deferred Payment L/C 

Deferred Payment L/C is an L/C whose payment is made within the time period specified in the L/C. For example, 180 days after the B/L date. If all documents received by the issuing bank meet the L/C requirements.

c. Acceptance L/C

Acceptance L/C is an L/C whose payment is made by the beneficiary through an acceptance or an accepting bank appointed by the issuing bank to accept the draft or bill of exchange submitted by the beneficiary.

d. Negotiation L/C 

Negotiation L/C is an L/C in which payment is made to the beneficiary or seller when you submit the documents required by the L/C and the payment is paid in advance at the expense of the negotiating bank.

Did you know that acceptance works together with bank guarantees?

Acceptance works closely with related bank guarantees to arrange billing in order to get the right results. Where the bill that appears is a form of the result of the use of acceptances and statements of willingness from the public to pay. So, the notes used will be futures in nature and last a long time.

The acceptance bill mechanism is in fact measured by the amount of fees obtained from the results which are amortized by using various methods in the form of an effective interest rate or commonly known as EIR.

Then, this will be reduced by a loss allowance process to reduce the value. So, a full review of these acceptances requires a liability that can be measured using the method in the form of interest rates.

Requirements for Making Acceptances Appropriately

There are several conditions that must be met by users in order to make an acceptance properly and correctly. Well, what are they? Following are some of the conditions for making an appropriate Acceptance, including:

  • First, namely the need for a statement about the unconditional ability that the user has.
  • Second, the users involved are allowed to make payment via billing system.
  • Third, namely in order to obtain the legality of a good acceptance note, it is required to sign it as proof of the acceptance statement.

The function of the Letter of Credit on Acceptance Bills

What is an acceptance and how does a Letter of Credit function? Through the ICC publication statement number 600, it is known as UCP 600 which states that the Letter of Credit on acceptance functions as an irrevocable promise directly related to the issuing bank. This acceptance letter of credit has the function of paying for an adjusted presentation, and seeing how important the documents involved can guarantee the importer concerned.

This Letter of Credit is usually also known as a documentary Credit which has many important terms in it. For example, authority to purchase and authority to pay with the same meaning.

As for the implementation process, acceptance plays an important role as a tool that can be used to finance all kinds of delivery of trade goods, be it on a national or international scale. So, here are some of the important roles of a Letter of Credit in acceptances, among others.

  1. Facilitate the process of paying off user payments through export transactions.
  2. Securing funds that have been set up by the importer to pay for the imported goods used.
  3. Guarantee all forms of completeness of shipping documents.
  4. A letter issued by the bank at the request of the importer addressed through foreign exporters through importer relations.
  5. Gives the right to exporters to withdraw lots of money orders for importers who are already involved or concerned.

Acceptance Form

Based on article 124 paragraph 1 of the Criminal Code, states that each acceptance is written in a bill of exchange with the word approved or with other meaningful terms. Not only that, it is also mandatory to sign interested. An interested signature that has been written on the face of the money order can already be used as an acceptance. Where, acceptances can be handwritten in the middle of something vertically, but can also be made to the left of the money order in question.

The form of this acceptance is based on article 125 of the Criminal Code, which states that accession must be carried out unconditionally, but the interested person has the right to limit up to a portion of the amount of money. If you are interested in accepting as the amount ordered to be paid, then it is not a requirement.

This needs to be connected with the obligation of the issuer to provide funds to interested parties. It may involve accepting part of the money order, because the issuer has not provided sufficient funds to pay for the note. So, what is a money order? So, in order to find out more about the discussion, see the discussion below.

What is Wesel?

Notes were first issued by American Express in 1882. He appeared to accommodate transactions for people who did not have access to a standard checking or savings account that could be withdrawn at any time. an expert named Serlika Aprita in his book The Law of Securities in 2021 says that money orders are securities, in which an issuer gives an unconditional order to the person involved to pay a sum of money on the day of payment to the person or recipient appointed by the issuer or his successor.

The simple definition given by investopedia , states that a money order is a certificate generally issued by the government or a banking institution that enables the beneficiary to make stated payments in order to receive cash on demand.

Based on the two definitions mentioned in the discussion above, it is known that there are three parties related to notes, namely:

  1. The issuer or drawer or tracker is the person who issues the money order.
  2. Interested or involved are parties who are required to pay.
  3. The holder or recipient or holder is someone who is entitled to payment in article 100 of the Commercial Law Code (KUHD), it is said that a money order is legal if it includes several things, including the following:
  • money order said
  • An unconditional order to pay a certain amount of money.
  • The name of the payer or interested or in the definition above is said to be stuck.
  • Payment day setting
  • Determination of place of payment
  • Recipient’s name
  • The date and place where the money order was withdrawn
  • The signature of the issuing party.

Then, what exactly is the function of money orders? A note is a means of paying credit or receivables. So with a money order, a seller can disburse money or receivables from a buyer in order to later become the company’s cash.

The securities that are the opposite of tomorrow are checks. Where, checks are also used as a means of paying cash. Notes are said to be a means of paying debts because payments can only be made on a specified day. Meanwhile, checks are said to be cash, because they can be immediately disbursed when submitted to the bank.

Types of Wesel

Money orders are a means of payment consisting of several types. So, what are the types of money orders, here is a more complete discussion.

1. Bills of Self-Replacement

In this type of note one, the issuer appoints himself as the first holder to pay the debt, the first holder will pay the holder or beneficiary with the note he has.

2. Notes on Self-Issuers

This second note makes the issuer interested or involved. So that he himself will pay off the receivables and there are no other parties such as banks.

3. Bills for Third Party Accounts

The purpose of this third type of note is that it is issued at the behest of a third person whose payment is also charged to the third party’s account. In that case, generally the issuer is a bank.

4. Bills of Accounts

Collection notes or notes used to collect are notes issued to authorize the first holder to collect a sum of money from the stake and are not intended to be transferred.

5. Domiciled Notes

A domiciled money order is a money order whose payment is made by someone other than the interested party or a third party. The payment for this money order is made at the place of a third party whose purpose is none other than to facilitate the transaction process.

How Money Money Works

Agung Sujatmiko in his journal named Hukum pro Justitia concluded that the check payment process is simpler and easier than money orders. That’s why, according to him, checks are preferred by the public as a means of payment which is also often used by the public. In order to come to a conclusion, you must know how the money order itself works or the flow.

Money orders are a means of payment that are relatively often associated with international trade. Therefore, it is necessary to discuss with examples of these cases. When concluded, the stages of how money orders work include:

  • The buyer or importer and the seller or exporter agree to a sale and purchase contract.
  • Goods will be sent by exporters using the means of transport that have also been agreed upon.
  • The exporter will later submit documents to the bank in his country (remitting bank) in order to bill the bank in the importer’s country.
  • The remitting bank will later carry out billing from the bank in the importing country or collection bank by submitting several documents.
  • A money order is a key document at this stage. Where, the collection bank will submit a bill of exchange document to the importer.
  • The importer will carry out the payment.
  • – Collection bank then pays to the remitting bank.
  • The remitting bank then hands it over to the exporter.

This stage is indeed quite long, plus the remitting bank cannot immediately disburse the funds after all the processes are complete, but only on a predetermined date.

Thus the information about acceptances, hopefully the information about acceptances can be helpful and useful for the readers. For Matobers who want to know more deeply about economics and other accounting, they can read related books by visiting