What are the types, properties and functions of bills?

Bill is a financial tool and a carrier of commercial credit. There are many functions of bills, which can generally be summarized as the following aspects.

1. Switching function

The exchange function means that the bill is a good exchange tool, rather than transporting cash in different places. Especially after the appearance of bills of exchange, it embodies the exchange function of bills. Remittance by draft usually means that the remitter pays the money to the bank, and the bank, as the drawer, sends the issued draft or sends it to the remitter to send it to another place, and the holder holds the draft to cash or transfer it in a foreign bank. This is more convenient, safer and cheaper than cash transfer.

2. Payment function

After the function of bills of exchange and promissory notes as exchange tools is formed, bills replace cash in transactions to form the payment function. Taking bills as a payment tool can save money, reduce the country's currency circulation, reduce the unnecessary trouble of carrying and checking cash, achieve the purpose of safe, fast and accurate capital operation, and thus improve the efficiency of capital use.

3. Settlement function

In economic communication, when both parties protect creditors and debtors, bills can be used to pay off debts, which is simpler, faster and safer.

4. Cycle function

The circulation function refers to the transfer of bills without notifying the debtor, but as long as the bills meet the requirements, the rights of bills can be delivered or transferred by endorsement. When an endorsement is transferred, the endorser shall be jointly and severally liable for the payment of the bill. The more endorsements, the more guarantors, so the more reliable the bill is. Therefore, as negotiable securities, bills are almost as liquid as money.

5. Credit function

This is the embodiment of bill as a commercial credit tool. Under the condition of modern economy, the periodicity and seasonality of production and operation determine the inevitability of commercial credit. In the credit transaction, the relationship between the rights and obligations of both parties who accept credit needs to be reflected through a certain carrier. This is the cause of the case. Moreover, because the bill law stipulates various restrictions on the defense of the bill debtor and strict protection of the bill creditor, the bill has become a reliable credit tool. In particular, the time draft can also make the payer adjust the temporary shortage of funds with credit, so that the business activities can be carried out in time and smoothly without time obstacles; For the payee, first, the bill can be cashed or transferred within the specified time, so that its creditor's rights can be guaranteed; Second, if the bill has not reached the payment date and needs to be fulfilled, it can also be endorsed and transferred to others. Therefore, both parties can use the credit function of the bill to meet their own needs. In addition, for people with poor credit in the past, bills issued, accepted or guaranteed by people with good credit can also be used for payment, so that economic activities can be carried out smoothly.

6. Financing function

The financing function of the bill means that when the bill expires, the obligee can discount it to the bank to obtain funds. Discount also includes discount and rediscount.

Different kinds of bills have different emphases in function. The main functions of bills of exchange are exchange, payment, credit and circulation. The main function of promissory note is as a credit tool, which is often used as a tool for exchange, payment and circulation. The only function of a check is as a means of payment, and it can also be used for foreign exchange or as a circulation tool. The credit function of checks is gradually being used by people.