What's the difference between commercial bills, checks, cashier's checks, collection and acceptance?

A bank draft is a bill deposited by an enterprise or individual in a bank and issued by the bank to them for transfer settlement or cash withdrawal in different places. Bank draft is a traditional instrument for bill settlement, which ceased to be used in China in 1950s. In order to meet the different needs of various economic sectors, various circulation channels and various trading methods since the reform and opening up, bank draft settlement has been promoted nationwide since 1984. Bank draft is the most widely used instrument for bill settlement, and its usage in 1999 accounts for 40% of the settlement business in different places.

Bank drafts are characterized by convenience, flexibility and strong liquidity, which can be used for enterprises, institutions, individual economic households and individuals to pay all kinds of money in different places. Tickets arrive with people, which is conducive to the timely purchase of units and individuals in urgent need of funds; Convenient and flexible, the holder can transfer the bill to the sales unit, or pay by installment or transfer by bank; Strong liquidity, the foreign agent payment bank in the signing and issuing system must pay the bill presented by the holder at sight, which is conducive to ensuring the payment of the bill. Therefore, bank drafts are welcomed by enterprises, institutions, individual economic households and individuals, with a wide range of applications and a large amount of use, which has played a positive role in facilitating off-site procurement.

(2) Commercial bills of exchange

Commercial bills are divided into commercial acceptance bills and bank acceptance bills. Commercial bills are applicable to commodity transactions in which the enterprise delivers the goods first and then pays, or both parties agree to postpone payment. Starting from 1995, the People's Bank of China decided to resume the settlement of commercial bills. This kind of bill is paid by the buyer or the bank, and the acceptor is responsible for unconditional payment at maturity, which has strong binding force on the payer, and is conducive to enhancing the credit of the enterprise and promoting the enterprise to repay the payment. The buyer and the seller can agree on a payment term of no more than 6 months as needed. In the case of temporary shortage of funds, the purchasing unit may purchase goods with acceptance bills. The sales unit is in urgent need of funds, and can apply to the bank for discount on the basis of the accepted draft, copy of VAT invoice and shipping documents, and replenish the funds in time. The sales unit may also transfer the bill to a third party for payment after endorsement on the back of the bill.

(3) cashier's check

A cashier's check is a bill that the applicant deposits money in a bank and is issued by the bank to transfer money or withdraw cash in the same clearing area. A cashier's check is a new settlement tool introduced by the People's Bank of China after the comprehensive reform of 1988 bank settlement system, which was implemented in cities all over the country on 1994. At present, the use of cashier's checks is not large. With the development of economy and the promotion of bills, the use of cashier's checks will gradually increase.

(4) check

Check is a traditional bill settlement tool in China, which is widely used in cities (towns). At present, check settlement accounts for about 75% of the settlement business in the same city. In the future, we will further expand the use scope and objects of checks, especially allowing and advocating individual economic households and individuals to open accounts in banks and use checks for settlement, so as to reduce the use of cash and meet the needs of economic activities at different levels.

Checks can be used to withdraw cash and transfer money, and can be used to settle funds such as goods trading, labor supply and debt repayment within the same city. The use of checks is simple and flexible, and they can also be signed on the back of checks and transferred to others, which is convenient for commodity trading and payment and settlement. The payee deposits the check in the bank, and the check can be credited to the account on the same day or the next day. To settle accounts by cheque, units and individuals must abide by credit and issue cheques within the balance of bank deposits. It is strictly forbidden to issue empty checks. Empty checks and checks that are inconsistent with the signature of the reserved bank shall be refunded by the bank and punished according to regulations.