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<ManualTopic ID="/baanerp/tf/onlinemanual/000419" xml:lang="en">
   <Header>
      <Title>Trade notes receivable</Title>
      <Keyword type="header" order="d1e1962253">
         <Level1>Trade notes</Level1>
         <Level2>receivable</Level2>
      </Keyword>
      <Keyword type="header" order="d1e1962258">
         <Level1>Receivable</Level1>
         <Level2>trade notes</Level2>
      </Keyword>
   </Header>
   <AimSection>
      <Paragraph>Trade notes receivable (TNRs) are documents received from a
		customer with the commitment to pay the amount due after a certain period of
		time (a promissory note). If you create a TNR, the open invoice entry is
		replaced with the payment document. Such TNRs can be <Link href="/baanerp/tf/glossary/glossary#000441" role="glossary">endorsed</Link> or <Link href="/baanerp/tf/glossary/glossary#000439" role="glossary">discounted</Link>.</Paragraph>
   </AimSection>
   <GeneralSection>
      <SectionTitle>Replacing an invoice with a trade note</SectionTitle>
      <Paragraph>Trade notes are a means of payment such as checks and bank
		drafts. Some trade notes do not come with a guarantee. Such trade notes are
		treated as normal anticipated receipts.</Paragraph>
      <Paragraph>Trade notes that consist of fresh obligations, which are usually
		secure, can replace the related invoices. In such cases, when the trade note is
		created, the invoice balance is reduced by the amount of the trade note, and a
		new open entry of a payment document type is created for the trade note. When
		the trade note is processed and the trade note status changes, the new open
		entry is also updated. As a result, the business partner's balance remains
		unchanged.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Discounting trade notes</SectionTitle>
      <Paragraph>As a trade note receivable can replace an invoice, to obtain
		funding before the trade note maturity date, you can arrange with your bank
		that the bank advances the amount due on the trade note. The bank deducts
		commission/ interest for the remaining tenure of the trade note receivable and
		remits the balance to the company. This is known as discounting the trade note.</Paragraph>
      <Paragraph>In the same way as the factoring of invoices, discounting a
		trade note can be with or without <Link href="/baanerp/tf/glossary/glossary#000425" role="glossary">recourse</Link>. If you discount a
		trade note receivable with recourse, you must repay the advance to the bank if
		your customer fails to pay.</Paragraph>
      <Paragraph>You must select <GUIRef href="/baanerp/tf/cmg/tfcmg0516m000#tfcmg016.deda" role="manual">Allow Discounts on TN</GUIRef> check box in the <GUIRef href="/baanerp/tf/cmg/tfcmg0516m000" role="session">Trade Note Types (tfcmg0516m000)</GUIRef> session and also the steps related to discounting in
		the receipt method. To process the trade note discounting, you must execute the <GUIRef href="/baanerp/tf/domains/cmg.step#doc.sent.disc" role="option">Doc. Sent to bank for Disc.</GUIRef> step first and later execute <GUIRef href="/baanerp/tf/domains/cmg.step#doc.discounted" role="option">Document Discounted</GUIRef> step. You must specify the <GUIRef href="/baanerp/tf/cmg/tfcmg4226m000#cmg.disc.det" role="groupbox">Discounting Details</GUIRef> such as, <GUIRef href="/baanerp/tf/cmg/tfcmg4226m000#dcur" role="manual">Currency for Discounting</GUIRef>, <GUIRef href="/baanerp/tf/cmg/tfcmg4226m000#disc.amnt" role="manual">Discount Amount</GUIRef> or <GUIRef href="/baanerp/tf/cmg/tfcmg4226m000#disc.perc" role="manual">Discount Percentage</GUIRef>, <GUIRef href="/baanerp/tf/cmg/tfcmg4226m000#comm.perc" role="manual">Commission Percentage</GUIRef> or <GUIRef href="/baanerp/tf/cmg/tfcmg4226m000#comm.amnt" role="manual">Commission Amount</GUIRef>.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Trade note steps</SectionTitle>
      <Paragraph>The trade note's status always indicates the last step
		performed on the trade note.</Paragraph>
      <List>
         <ListIntro>Trade notes receivable can have the following
		  statuses:</ListIntro>
         <ListItem>
            <GUIRef href="/baanerp/tf/domains/cmg.tnst#open" role="option">Open</GUIRef> (initial status)</ListItem>
         <ListItem>
            <GUIRef href="/baanerp/tf/domains/cmg.tnst#received" role="option">Received</GUIRef>
         </ListItem>
         <ListItem>
            <GUIRef href="/baanerp/tf/domains/cmg.tnst#sent.to.bp" role="option">Sent to BP</GUIRef>
         </ListItem>
         <ListItem>
            <GUIRef href="/baanerp/tf/domains/cmg.tnst#accepted.sent" role="option">Accepted/Sent</GUIRef>
         </ListItem>
         <ListItem>
            <GUIRef href="/baanerp/tf/domains/cmg.tnst#matured" role="option">Matured</GUIRef>
         </ListItem>
         <ListItem>
            <GUIRef href="/baanerp/tf/domains/cmg.tnst#sent.to.bank" role="option">Sent to bank</GUIRef>
         </ListItem>
         <ListItem>
            <GUIRef href="/baanerp/tf/domains/cmg.tnst#paid" role="option">Paid</GUIRef> ( <GUIRef href="/baanerp/tf/domains/cmg.tnst#settled" role="option">Settled</GUIRef>)</ListItem>
         <ListItem>
            <GUIRef href="/baanerp/tf/domains/cmg.tnst#void" role="option">Void</GUIRef>
         </ListItem>
         <ListItem>
            <GUIRef href="/baanerp/tf/domains/cmg.tnst#cancelled" role="option">Cancelled</GUIRef>
         </ListItem>
         <ListItem>
            <GUIRef href="/baanerp/tf/domains/cmg.tnst#dishonored" role="option">Dishonored</GUIRef>
         </ListItem>
         <ListItem>
            <GUIRef href="/baanerp/tf/domains/cmg.tnst#discounted" role="option">Discounted</GUIRef>
         </ListItem>
         <ListItem>
            <GUIRef href="/baanerp/tf/domains/cmg.tnst#collateral" role="option">Collateral</GUIRef>
         </ListItem>
         <ListItem>
            <GUIRef href="/baanerp/tf/domains/cmg.tnst#endorsed" role="option">Endorsed</GUIRef>
         </ListItem>
      </List>
      <Figure space-and-orientation="indented-estimated">
         <HTML:IMG xmlns:HTML="http://www.w3.org/TR/REC-html40" height="559" width="809"
                   SRC="../images/tr_chart_tnr.jpg"
                   alt="[...]"/>
      </Figure>
      <Paragraph>When you define a trade note receipt method, you can select the
		steps to be performed on the trade note. Some steps are only available for
		trade notes payable, and some only for trade notes receivable. Of some steps,
		the availability depends on the selection of other steps. For some steps, you
		can indicate that the step is optional.</Paragraph>
      <GeneralSection>
         <SectionTitle>Reconciliation</SectionTitle>
      </GeneralSection>
      <Paragraph>When the trade note matures, the cash is actually realized. The
		trade notes can then be reconciled and then settled. Before a trade note
		matures, the trade note can be canceled. After maturity or reconciliation, the
		trade note can be dishonored if the customer fails to honor the payment. To
		update the anticipated balance after reconciliation, select <GUIRef href="/baanerp/tf/cmg/tfcmg0140s000#tfcmg003.adbp" role="manual">Update Anticipated Balance upon Reconciliation</GUIRef> check
		box in the Receipt method.</Paragraph>
      <Paragraph>Refer <Link href="/baanerp/tf/onlinemanual/000408" role="manual">To set up and process trade notes receivable</Link> for details
		on how to select the steps for each type of trade note.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Collateral</SectionTitle>
      <Paragraph>Trade note secured with the bank to get loan. In the receipt
		method the <GUIRef href="/baanerp/tf/domains/cmg.step#doc.collateral" role="option">Document Collateral</GUIRef> step must be selected. When the step
		is executed you must specify the <GUIRef href="/baanerp/tf/cmg/tfcmg4226m000#cold" role="groupbox">Collateral Details</GUIRef> such as <GUIRef href="/baanerp/tf/cmg/tfcmg4226m000#bank.coll" role="manual">Bank for Collateral</GUIRef> or <GUIRef href="/baanerp/tf/cmg/tfcmg4226m000#deps.coll" role="manual">Collateral - Depositor</GUIRef>.</Paragraph>
      <Paragraph>Trade notes receivable used as collateral can be sent to the
		bank again for reconciliation after the obtained loan has been cleared in the
		bank.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Endorsement</SectionTitle>
      <Paragraph>The process of transferring the company’s trade note receivable
		to the supplier there by clearing the payment due to the supplier is known as
		endorsing. For more information, refer to <Link href="/baanerp/tf/onlinemanual/000580" role="manual">To endorse a trade note</Link>.</Paragraph>
   </GeneralSection>
   <RelatedTopics>
      <SectionTitle>Related topics</SectionTitle>
      <RelTopic>
         <Link href="/baanerp/tf/onlinemanual/000408" role="manual">To set up and process trade notes receivable</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/tf/onlinemanual/000407" role="manual">Trade notes division</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/tf/onlinemanual/000410" role="manual">Prerequisites for trade notes financial postings</Link>
      </RelTopic>
   </RelatedTopics>
</ManualTopic>