How to fill out a bill of exchange
A bill of exchange is an unconditional written order requiring one party to pay a fixed sum to another, on demand or at a determinable future date. In trade it is the instrument that sits behind a documentary collection, and its wording matters more than most shipping documents because a defect can make it unenforceable.
The 14 fields on a bill of exchange
Taken from the document itself, in the order it prints them.
- Document No.
- Place of Issue
Where it was drawn. It bears on which law governs the instrument, which is why it is on the face rather than implied.
- Date
- Amount in Words
The sum in words as well as figures. Where the two disagree, the words generally prevail — which is precisely why both are required, and why this field is not decoration.
- Currency
The currency of payment. A bill without one is ambiguous about the sum, which is one of the ways a bill fails to be a bill.
- Payment Terms
The tenor: at sight, or at a determinable future time — \u201c90 days after sight\u201d, \u201c60 days after bill of lading date\u201d. It must be certain. \u201cWhen the goods are sold\u201d is conditional, and a conditional order is not a bill of exchange at all.
- Payee
Who is to be paid. Usually you, or your bank where the bill has been discounted. \u201cPay to the order of\u201d makes it negotiable and transferable by endorsement.
- Invoice No.
The underlying transaction. Not required for validity, and it is what lets the bill be reconciled to a shipment.
- B/L / AWB No.
The transport document travelling with it under a documentary collection, which is the mechanism: the bank releases the documents against payment or acceptance.
- Drawee
Who is ordered to pay — the buyer under a documentary collection, or the bank under a documentary credit. The bill is addressed to this party, and it binds them only once they accept it by signing across the face.
- Applicant
Under a documentary credit, the party who opened it. Included so the bill can be matched to the credit it is drawn under.
- Name
The drawer, signing. An unsigned bill binds nobody — the signature is what makes it an order rather than a request.
- Title
- Company
A working bill of exchange, prefilled with a sample shipment. Every field above is editable here, and it downloads as a PDF.
At sight of this FIRST Bill of Exchange (SECOND of the same tenor and date being unpaid) pay to the order of the sum of , value received, drawn under documentary collection covering invoice and bill of lading .
Your entries are kept as you move between documents: the parties, ports, container and line items all carry across.
Unconditional is the operative word
The order to pay cannot depend on anything. \u201cPay on receipt of satisfactory goods\u201d is conditional and destroys the instrument's character, which means it can no longer be discounted, negotiated or enforced as a bill. If you need conditions, they belong in the sales contract, not on the bill.
Sight against usance
A sight bill is payable on presentation, which under documents against payment means the buyer pays before receiving the documents that release the cargo. A usance bill is payable at a future date; the buyer accepts it, takes the documents, collects the goods and pays later. Documents against acceptance therefore extends credit — you have handed over the cargo against a promise.
Acceptance, and what it is worth
The drawee accepts by signing across the face. That turns a demand into a debt they are bound by. An accepted bill can be discounted with a bank for cash before maturity, and where a bank adds its own acceptance the paper becomes considerably more valuable. Dishonour on presentation is what triggers protest and the recourse that follows.
+Is a bill of exchange the same as a draft?
Yes, the terms are used interchangeably in trade. \u201cDraft\u201d is the more common word in North America.
+Do I need one for a letter of credit?
Many credits require a draft as part of the presentation, drawn on the issuing or confirming bank. The credit says whether it wants one and on whom it should be drawn — follow that exactly.
+What is the difference between D/P and D/A?
Documents against payment releases the shipping documents only when the buyer pays. Documents against acceptance releases them when the buyer accepts a usance bill, so they get the goods before paying. D/A carries materially more risk for the seller.
+What happens if it is dishonoured?
The bill is protested — a formal record of non-payment — and the holder has recourse against prior parties, including the drawer. The procedure and timing are governed by local law, and missing the window can lose the recourse.
Judge it by the document, not the feature list.
Everything above is already on the form. Fill it in and download the PDF — no account needed.
Open the bill of exchange generator