Glossary term
Bill of Exchange
A written order requiring one party to pay a specified sum to another, on demand or at a stated future date.
An unconditional written order from one party, the drawer, requiring another, the drawee, to pay a sum either on presentation or at a future date.
It underpins documentary collections. A sight draft is payable on presentation; a time draft is payable later and becomes binding on acceptance. Also called a draft.