Bill of Exchange, Promissory Note, and Inventory Management
Bill of Exchange
A bill of exchange is a degree or formal document that includes a mandate for which a person, drawer, orders another, the drawee, to pay a certain amount of money to the payee or legitimate holder thereof, at maturity.
Features
- It’s a title or document that includes a payment order.
- The document or formal title is:
- Features a term of payment to the drawee.
- It’s a means of payment used to defer payment over time.
- Incorporates the promise to pay the lawful taker or possessor of the letter at maturity an amount of money.
Parties Involved
- Drawer: Person issuing the bill of exchange, gives payment orders, and who should pay. This will be the one who sells the merchandise.
- Drawee: Person who is ordered to pay, who has to pay.
- Payee or Taker: Person to collect, the one whose order has to verify the payment.
- Guarantor: Guarantees payment if the principal concerned does not.
- Endorser: Person who transmits the letter.
- Endorsee: Person to whom the bill of exchange is transmitted.
- Domiciliary: Person in charge of the drawee to pay the appropriate letter.
Endorsement of the Bill of Exchange
- Full: Transmits all the rights incorporated in the title.
- Limited: In this case, the letter is transmitted as collateral or to manage its collection.
Endorsement
It is a declaration by the person guaranteeing the payment of the bill if the obligation to endorse is not met.
Formal Endorsement
- The guarantor must sign the clause on the endorsement.
- It will be understood to identify the guaranteed if nothing is indicated, it is the book that is endorsed.
- There is no requirement to display the date of incorporation.
- It is not required to endorse the totality of the amount of the bill of exchange.
The Promissory Note
A promissory note is a written commitment that a person named signatory contracts to pay a beneficiary or holder a specific amount on a payment date and at a maturity that the document sets.
- It must comply with any formal model, which did not pass the bill of exchange.
- The name of the subject varies. In the promissory note, we speak of the signatory, recipient, and holder.
- With regard to the material elements, it is shown that the promissory note must contain elements resembling those of the draft.
Parties Involved in a Promissory Note
- Signer
- Payee or Holder
- Endorsee
- Guarantor
Formal Elements of a Promissory Note
- Denomination of the promissory note inserted.
- Promise to pay a certain amount.
- Place of payment.
- Name of the person to whom payment is to be made.
- Place and date of signature.
- Signature of the issuer of the title.
- The indication of maturity can be: a fixed date, a period from the date, within the view.
The drawer of a bill of exchange:
- Agrees with the supplier in a purchase operation.
A letter with a clause “not to order” cannot be endorsed.
- True
A letter due to a longer period after the hearing:
- Expires when the period of time passes, computed from the acceptance date.
Only pay postage to the promissory note:
- When the order is extended.
- When you yield to discount.
A promissory note always needs to be accepted by the undersigned.
- False
A promissory note can never be endorsed.
- False
Factoring is:
- A financial product related to payment management.
Explicit costs of collection are:
- The salary of the employee who manages the collection.
- Bank charges for collection management.
Warehouse Management
Main Tasks in the Warehouse
- Provide input to stocks.
- Stock custodian.
- Sort and place stocks according to previously established criteria.
- Add the stock to the production process or for sale.
Purchase Price
Purchase price = Invoice amount + shipping (to store) + indirect taxes (non-recoverable)
Weighted Average Price or Cost
(Initial stock * price) + Sum (units purchased or produced * value) / (Initial stock + total units purchased or produced)
Value: Purchase Price or Cost of production
FIFO (First In, First Out)
It outputs the stocks in the same order they were purchased or entered the factory in the warehouse.
Inventory
It is a report that contains the detailed and worth of stock held by the company, duly classified.
Not a function of storage management:
- Select providers.
According to the General Accounting plan, stocks:
- Should be valued at cost.
- They must be valued at production cost.
At any time, the company can change the endpoint of existence, provided they meet economic conditions, technical, or organizational warrant.
- False
There is no legal obligation to draw up inventories in the company.
- False
A company that manufactures the goods will be valued at their warehouse:
- At the cost of production.
To determine the purchase price of an item is not taken into account:
- Tax recoverable from the Inland Revenue.
Among the types of inventories are:
- The cycle counting.
VAT is always part of the purchase price.
Stock Management
Stock or goods refer to all products accumulated in the warehouse, which have economic value and remain there until their use or resale.
Store Management
- Storage.
- Information available material stock management.
- Determination of when to ask.
- And how much stock management.
Classification of Existence for PGC
- Raw materials: elements to transform.
- Elements and attachable sets.
- Materials for consumption and replenishment.
- Work in progress.
- Semi-finished products.
- Finished goods.
- By-products.
- Packaging materials.
- Goods.
Existence in the PGC
Tangible property, with the possibility of being stored, which acquired companies overseas in order to be used in the production process for obtaining final products or for the maintenance of production equipment.
Types of Stock by Purpose
- Active: Necessary to meet expected demand in a given period, evolves between a maximum and minimum.
- Security: Add the asset to meet the risks of shortages because of a delay in the provision of goods, a change within procurement, or a change in expected demand.
- Optimum: Can meet the optimistic forecasts of sales while providing a better return.
- Medium: Average stock that the company has in store.
- Season: Is created to meet an expected increase in sales, a change due to seasonal or station.
- Speculation: Is being planned before the need arises and is used to cope with the expected variation in demand, supply, or price.
- Just in Time: Is to purchase only the amount needed at the time that is required. From a logistical point of view, it is the optimal stock.
Determination of Safety Stock and Stock Average
Safety stock = (CM – Cmd) * Delivery
CM = Maximum Consumption
Cmd = Average consumption
The Total Stock of the Company
It is given by the sum of all the stocks that it owns and is identified as the maximum stock there at any given time in the company.
The safety stock + the stock asset at the time of calculation + stock presentation or exhibition
Stock Management
Set of activities within the company can know exactly the volume of stock sales or outputs in order to determine the precise amount to ask suppliers.
Level of Service Offered
This ratio represents the ability of the company to offer products that the customer demand at the time of purchase.
Level of service = (sales / demand) * 100
The Stock Turnover Rate
Represents the number of times in a combined time renewing the stock in the store, recovering the invested capital investment.
IRS = Out of stock / average stock
Analysis of Results of Rotation of Stock Index
- Please be aware that an appropriate IRS must always be greater than one.
- If it’s too high, it indicates that it moves us, renews quite often. Attention should be given to safety stock to avoid breakage.
- If it is too low (below one), it indicates that the investment is not productive and move little items.
Maturity Period
It is the time between the monetary investment in commodities and other products to the collection of products made with them, if necessary, sold to the customer.
A company wishing to have a very high level of service:
- Should pay particular attention to safety stock.
The active stock:
- Evolves between minimum and maximum.
A stock turnover rate high forces us to pay special attention to safety stock to avoid breakage.
- True
Stock management and warehouse management are looking to refer to the same activity within the supply management across the enterprise.
- False
Inventory management in the company to:
- Reduce storage costs.
- Reduce the risk of rupture of stocks.
According to the PGC, the goods are inventories of a commercial enterprise.
- True
Indicates the replenishment period:
- The days between we ship an order and eat.
Indicates that it is not considered when determining the MMP in a commercial enterprise:
- The average period of production.