This local operational procedure (LOP) demonstrates processes and procedures to execute account receivable activities in E-Bank Draft Acceptance for legal entities in CHINA. This LOP provides instruction for users to perform recurring activities and reacting expected scenarios.
This local operational procedure (LOP) applies for Accounts Receivable activities of CHINA entities:
Solvay Chemicals (Shanghai) Co Ltd | 6078 |
Solvay (Shanghai) Co Ltd | 5876 |
Solvay (China) Co Ltd | 7728 |
Solvay (Shanghai) International Trading Co Ltd | 6859 |
Solvay (Zhenjiang) Chemicals Co Ltd | 7811 |
Solvay (Zhangjiagang) Specialty Chemicals Co Ltd | 6526 |
Solvay Hengchang (Zhangjiagang) Specialty Chemical Co Ltd | 7810 |
Cytec Engineered Materials ( Shanghai) Co Ltd | 7776 |
Cytec Industries ( Shanghai) Co Ltd | 7734 |
*other China entities are under Cashier (Finance Local team) scope.
Process Flow (shown in the process)
Bank Draft is one of the regular payment methods in China, Solvay requires all Bank Drafts received to be in Electronic form, these are known as "Electronic Bank Drafts" or "e-BD",
and there are standardized control and procedure to accept Electronic Bank Draft that are paid by customers.
Step:
On a daily basis, AR monitor and accept Electronic Bank Draft as following procedures:
1) Login to bank portal to monitor bank draft receiving;
1.1) After login, go to "Draft Service" and "Draft Service Home Page". 
1.2) Select bank account and click at the pink number in the portion of "Confirm Draft Receipt" and "Endorsee's Signature" to see bank draft details. 
1.3) Download or copy bank draft details and paste them into a defined shared point. 
2) Verify Bank Draft qualification whether it aligns to company policy **; 
** The latest Bank Draft Policy communicated in October 2020. (Link to Bank draft policy of Treasury)
If Bank Draft is unqualified, it can either be rejected or be accepted, but it requires confirmation from the Controller and approval from the Head of Treasury APAC. Usually, the Controller would consider its availability to be transferred to the vendor.
3) Accept Bank draft on bank portal;
3.1) Select account number and Bank draft, then click "Agree to Accept By Endorsement". 
3.2) Notify the authorities (Controller or CAM) to authorize online at the 2nd level.
4) Check acceptance status;
4.1) Go to "Draft Service", "E-Draft Inquiry" and "Signing Operation Record Inquiry" 
4.2) Insert required information and click "Inquire"
Below is the list of operation statuses. 
Please note that the acceptance process is completed when the status is changed to "Operation Succeeded". 
Sometimes customers would request to return the Bank draft back, either the same Bank draft or another with a lower amount, it depends on the agreement with business team.
Step:
After receiving request from business team and confirmation from the controller or CAM, AR follows the below procedures:
1) Login to bank portal to apply for Endorsement;
1.1) Go to "E-Draft Service", "E-Draft Endorsement" and "Endorsement Application" 
1.2) Select account number and select bank draft 
1.3) Insert information of beneficiary name and bank details, then click "Submit" 
1.4) Notify the authorities (Controller or CAM) to authorize online at 2nd level
2) Check endorsement status;
2.1) Go to "Draft Service", "E-Draft Inquiry" and "Request Operation Record Inquiry" 
2.2) Insert required information and click "Inquire"
Below is the list of operation status.
Please note that endorsement process is completed when the status is changed to "Operation Succeeded".
3) Cancel Endorsement when it is required;
3.1) Go to "E-Draft Service", "E-Draft Endorsement" and "Cancel Endorsement" 
3.2) Select tab "Withdraw pending authorization transactions" or "Withdraw sent transactions not signed by counterparty", then inert required information and click "Inquiry" 
3.3) When the result is displayed, select Bank draft and click "Submit".
Please note that only "Withdraw sent transactions not signed by counterparty" requires authorization at 2nd level.
According to customers' indications and foreseeing, the issuing bank unconditionally makes the payment to the payee or bearer upon the draft presentation, based on the actual settlement amount and payment maturity.
Step:
All e-Bank Draft received on hand is set as automatic payment collection, once payment is not automatically released, AR is responsible to monitor, check and collect payment manually according to the following procedure:
1) Apply for automatically releasing payment;
1.1) Go to "Draft Service", "E-Draft Check" and "Quick E-Draft Setting" 
1.2) Account number is selected upon request, but other fields must be set as follows,
2) Manually apply for payment when the payment is not automatically released;
2.1) Go to "Draft Service", "Present E-Draft for Payment" and "Apply to Present for Acceptance" 
2.2) Select Account and Bank draft, insert "Date of presentation for payment" and "Overdue reason statement", then click apply.
2.3) Notify the authorities (Controller or CAM) to authorize online at 2nd level.
3) Check payment status;
3.1) Go to "Draft Service", "E-Draft Inquiry" and "Request Operation Record Inquiry"
3.2) Insert required information and click "Inquire"
Below is the list of operation status.
Please note that payment process is completed when the status is changed to "Operation Succeeded".
3.3) Check payment failure reason, when payment status is found that operation is not succeeded, please check the reason by clicking at Note Number 
The reason is presented in the "Replied Message" field. 
On a monthly basis, Bank Draft Reconciliation is one of mandatory activity and significant report, it is to ensure that all Bank Draft related transaction has been recorded in SAP.
Step:
After ensuring there are no more Bank Draft activities at month-end, AR follows the below procedures:
1) Download E-Bank Draft on-hand list from bank portal;
1.1) Go to "Draft Service", "E-Draft Inquiry" and "Held Draft Inquiry" 
1.2) Insert required information and click "Inquire", then download information in excel file.
1.3) Make screenshot of E-Bank Draft balance from "E-Draft Check" and "Initiate Check". 
2) Check E-Bank Draft SAP balance;
2.1) Open transaction FS10N and insert required information,
For PF1, 2213000010 (BD >3 months) and 2213000000 (BD<3 months)
2.2) Click "Execute" to display inquired balance. 
3) Cross check the balance between bank portal and SAP;
E-Bank Draft SAP balance is supposed to equal to balance in the bank portal, if there is any difference, gap analysis is required.
Then put all evidence and comment into Bank Draft Reconciliation Report, and send mail to CAMs for verifying.
