PAGARÉS discount ☝ [Explanation and updated guide 2019]

Promissory notes are documents used by companies that allow them to obtain liquidity by discounting promissory notes before completing work.

What is a promissory note

It is a document that commits a person (subscriber) to pay another (beneficiary or holder), an amount of money within a specified period of time.

In this time interval, the holder is obliged to provide a good or service in exchange for receiving the amount of money that the subscriber has agreed to pay through the promissory note.

A promissory note can have various uses depending on the conditions of the parties that sign it.

A promissory note document justifies with its use a payment guarantee, with companies that use this document the most in their commercial transactions.

The promissory notes have an advantage over the bill of exchange, a promissory note has collection power guaranteed by law, especially in the commercial codes of each state.

I will pay to order

Promissory notes to order are all those that do not include the clause not to order.

These notes are transmitted by endorsement with the signature of the endorser on the back of the note and delivery of the note material to the endorsee who acquires all rights to the note.

How to fill out a promissory note

Filling out a promissory note is a simple task, in it we must identify the data regarding the holder, the amounts to be collected and collection dates.

1. In the upper left part the identification of the drawer (company that issues the promissory note) will go.
2. Amount in Euros to pay.
3. Place of payment of the promissory note.
4. The third position will indicate the place of payment where the payment of the promissory note will be made.
5. Signature or stamp of the company.
6. Place and date of collection of the Promissory Note.

What is the discount of promissory notes

A discount of promissory notes is a procedure by which a company (holder of a promissory note) requests a financial entity to advance the amount of the promissory note before the due date.

This discount of the promissory note will generate a commission and an interest that favors the financial company that discounts it.

How the discount of promissory notes works

To get the discount of a promissory note we must negotiate with the financial company the conditions of advance of the same.

A copy of the promissory note and invoice that associates the work will be the only documentation that you will need to provide so that the financier can advance you the money.

How to post the discount of promissory notes

The accounting entries to be identified in relation to the receipt and discount of promissory notes are as follows.

For the receipt of the promissory note:

(431) Clients, portfolio securities

To (430) Customers

Discount of promissory notes:

(4311) Customers, discounted trade bills

A (431) Clients portfolio securities

For the payment of the discount at the bank:

(572) Bank

A (5208) Debts for discounted effects.

At maturity, cancel the debt for the discounted effect:

(5208) Debts for discounted effects.

A (4311) Customers, discounted commercial bills.

If a promissory note is paid when it is due, there is no need to make any further notes, however if it is unpaid when the charge is made to our account:

(4315) Unpaid trade bills

A (572) Banks

If the recovery management fails and there are well-founded reasons that the debt will not be collected: (436) Clients of doubtful collection

A (4315) Unpaid trade bills

The best companies to discount promissory notes

The discount of promissory notes is a service in high demand by companies that, as we have already commented previously, allow them to advance the money for their billed services.

Thanks to this demand, there are quite a few companies to discount promissory notes in Spain.

GEDESCO
Gedesco is one of the best known companies. It offers financial services to companies to obtain urgent liquidity and discount of promissory notes. It is one of the most recommended.

FINANZAREL
Finanzarel is a company specialized in invoice advance and discount of promissory notes. It works in the style of a P2P lending platform that specializes in discounting promissory notes, allowing investors to access the platform to participate in the business.

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