3.2.9 Automatic Liquidation of Bills
The auto-liquidation function liquidates all the outstanding components of a bill contract on the liquidation date specified for the bill. To recall, the liquidation date is calculated in the following manner:
Maturity Date = Base Date + tenor + transit days
This function will liquidate only active bills for which you have specified the liquidation method as automatic. The pertinent details of the bill with respect to tax, limits, profit and charges will be updated to indicate that the bill has been liquidated and authorized.
When we run as part of the BOD process, the function automatically liquidates all the bills that have a liquidation date between the last working date and the current processing date.
When we run as part of EOD the function liquidates those bills that was processed during the day and need to be liquidated as on the current day. If the next working day is a holiday, and you specified that in the branch parameters screen that holiday processing should be done up to the last working day - 1 such bills will be liquidated as part of the BOD run on the previous day.
If Main settlement account has ‘External Credit Approval Required’, if ECA is approved LIQD will be triggered otherwise LIQF will be triggered.
When a bill is automatically liquidated by the function the necessary accounting entries specified for the liquidation event (LIQD) will be booked and automatically authorized.