Why bills of exchange and bank acceptances still matter in B2B
In commercial relationships between Swiss companies, bank transfers and QR invoices cover most collections. However, structured receivables, negotiated payment terms, payment guarantees or working-capital financing still call for bills of exchange and bank acceptances—they provide an instrument suitable for bill-of-exchange enforcement (with protest where required) and a binding maturity date for both parties.
The bill of exchange (draft) and promissory note fall under federal bill-of-exchange law codified in the CO (Art. 990 et seq., SR 220), in harmony with the Geneva Convention on Bills of Exchange and Promissory Notes (SR 0.221.554.1). For an SME, mastering issuance, circulation and any discounting with the bank means avoiding formal nullities, unexpected protest costs and accounting entries inconsistent with the financial statements and auditor review.
This guide outlines the operational and accounting cycle for negotiable instruments in the Swiss B2B context, with practical references to Swiss GAAP FER line items and choices worth documenting in treasury policy and in Accountex.
Bill of exchange, draft and bank acceptance: what distinguishes the instruments
Before issuing or accepting an instrument, align commercial language with the CO’s legal terminology:
Promissory note
Written promise by the issuer (bill debtor) to pay a specified sum to the payee on the stated maturity date (Art. 1096 CO). The issuer signs the instrument; no third-party acceptance is required.
Bill of exchange (draft) and bank acceptance
Order by the drawer to the drawee (customer-debtor, bank or other party) to pay the payee (Art. 991 CO). It becomes binding only after acceptance by the drawee, typically by signing “for acceptance” on the instrument or on a separate document. A bank acceptance is the typical case where the drawee is a bank that accepts the draft.
An aval (bill guarantee, Art. 1020 et seq. CO) may be given by a guarantor—including a bank—and makes the avalist liable like an acceptor. In B2B, bank aval and accepted drafts are typical when the supplier seeks security beyond ordinary commercial trust in the customer.
Bill of exchange, cheque and bank transfer: operational comparison
The choice of payment method affects enforceability, bank charges and accounting traceability:
| Aspect | Bill of exchange / draft | Bank cheque | Transfer / QR invoice |
|---|---|---|---|
| Legal basis | CO, Art. 991 et seq. and 1096 et seq.; strict formal requirements | CO, Art. 1100 et seq.; declining use | CO / banking relationship; payment rules |
| Maturity | Fixed date on the bill | Payment at sight unless otherwise stated | Agreed value date; no negotiable instrument |
| Negotiability | Transfer by endorsement; bank discounting possible | Limited; rarely discounted | Not applicable |
| Default | Bill protest; bill-of-exchange enforcement (DEBA) | Protest; risk of uncovered cheque | Reminder / ordinary debt action |
| Typical accounting | Receivables/payables on bills; bank clearing account | Clearing until collection | Direct posting to bank or receivables |
| SME adoption 2026 | Sectors with long payment terms, export, guarantees | Sporadic | Standard for domestic invoices |
Compliant issuance: formal requirements and B2B flow
A defective instrument may lose its character as a negotiable bill and invalidate protest and discounting. Check at least these mandatory elements (Art. 991 and 1096 CO):
- 1.Designation of the instrument (bill of exchange or promissory note) in the text, in the language in which the instrument is drawn up.
- 2.Unconditional order or promise to pay a specified sum.
- 3.Name of the payee or indication of payment “to order”; for a bill of exchange (draft), also the name of the drawee.
- 4.Maturity, place of payment, date and place of issue, signature of the drawer (draft) or issuer (promissory note).
Example flow between supplier and customer
The supplier delivers goods and invoices with payment due in 90 days. Instead of a simple deferral of payment, the customer issues a promissory note or bill of exchange in favour of the supplier for the agreed net amount (VAT usually already settled on the original invoice). The supplier records the trade receivable as bills receivable and keeps the original in a safe or in bank custody.
If the counterparty proposes a draft, the supplier (payee) presents it to the drawee for acceptance before treating the instrument as “firm”. Only after acceptance—or aval—does it make sense to plan discounting or transfer to third parties.
Bill discounting: early liquidity and costs to budget
Discounting (escompte) means transferring to the bank an instrument not yet due in exchange for immediate credit, net of discount interest, fees and—if provided—a recourse reserve if payment fails at maturity.
The bank assesses issuer risk, strength of any aval and documentation (invoice copy, contract, payment history). The discount rate is not uniformly regulated: it appears in the framework credit agreement or in a specific offer. For the SME, compare the effective cost with alternatives (revolving credit, factoring, advance on insured receivables).
| Stage | Action | Useful documentation |
|---|---|---|
| Preparation | Endorsement in favour of the bank; delivery of instrument and discount request | Underlying invoice, customer statement, aval if any |
| Credit | Bank credits face amount less discount and charges | Credit advice with net breakdown |
| At maturity | Bank presents instrument for payment; collection or recourse | Clear clearing account; possible liability to bank on recourse |
Discounting does not automatically transfer every risk: with a recourse clause, non-payment by the original debtor can reopen a receivable from your company. Build this scenario into credit monitoring in Accountex.
Compliant accounting (Swiss GAAP FER / CO)
Swiss SMEs with full bookkeeping apply the Swiss GAAP FER framework. Below is a common pattern; adapt account numbers to your chart and presentation choices (current assets vs medium-term receivables if maturity exceeds 12 months).
Receipt of bill from customer (trade receivable)
When the instrument is issued in substitution of or as security for the invoice receivable:
Debit bills receivable · Credit trade receivables
VAT generally remains on revenue at invoicing; the bill documents deferred payment, not a new taxable transaction.
Discounting with the bank
On net credit:
Debit bank · Debit interest expense (discount) · Debit bank charges · Credit bills receivable (or discounted bills clearing account)
When the bank collects at maturity, close the clearing account against bank. On recourse: reactivate the receivable from the customer or record the default according to your bad-debt policy.
Issuing a bill to a supplier (payable)
When you pay a supplier with your own instrument:
Debit trade payables · Credit bills payable
At maturity and payment: settle the bill liability against bank or cash. Any bank fees belong in financial expenses.
At year-end, classify instruments by maturity, assess any impairments (Art. 960 CO) if the debtor is in difficulty and disclose in the notes any discounting limits and guarantees received, where material to the reader of the financial statements.
Protest, aval and risk management
Protest for non-payment
Bill protest documents default and preserves rights against bill obligors (drawer, accepting drawee, endorsers, avalists). Observe the deadlines under the CO for presentation and protest; procedural errors can prejudice enforcement and bill-of-exchange execution.
Aval and internal controls
Bank aval reduces default risk but has a cost and a line limit. Internally, segregate signatures on instruments from bank transfer payments, maintain a maturity register and safeguard originals with traceability (who endorsed, to which bank, with what recourse).
Digitalisation: paper instruments, bank and Accountex
Swiss bill-of-exchange law generally requires a paper document compliant with the CO for the instrument to be valid. Banks may still digitise routing (scanning, discount workflow, maturity notifications). In Accountex it pays to:
- •Link each instrument to the invoice and trading partner for automatic reconciliation at maturity.
- •Record discounting, fees and bank clearing accounts with value dates aligned to the bank statement.
- •Generate bills receivable/payable maturity schedules for treasury and the auditor.
Operational checklist for management and accounting
| Check | Owner | Frequency |
|---|---|---|
| Verify CO formal requirements (bill/promissory note) before acceptance | Administration / management | Per instrument |
| Update maturity register and custody of originals | Treasury | Weekly |
| Reconcile bills / clearing accounts with bank | Accounting | Monthly |
| Compare discount cost vs other credit lines | Finance management | Quarterly |
| Document aval, recourse and protest in audit file | Accounting / internal audit | As occurred / annual |
A written policy on when to accept bills (maximum amount, permitted customers, aval requirement) reduces commercial friction and surprises in the financial statements. If in doubt about cross-border instruments or special clauses, have the practice validated by a fiduciary or adviser familiar with Swiss bill-of-exchange law.