Bill of Exchange FAQs What is meant by the collection of bills? To send money or goods to someone else through somebody called as "collector". This person will receive the money or goods and deliver it to the intended person. The collector usually charges a fee which is called 'commission'. What is a bill of exchange? A Bill Of Exchange is an unconditional order in writing, addressed by one person (the drawer) to another (the drawee), signed by the drawer, requiring the drawee to pay on demand a certain sum in money to, or to the order of, a certain person (the payee). All bills of exchange must contain a definite date on which they become due. When does a bill first come into existence? A bill first comes into existence when it is signed by the drawer and accepted by the drawee. What is the difference between a bill and a cheque? The main difference between a bill and a cheque is that a Bill Of Exchange is not payable on demand, whereas a cheque is. A bill becomes payable at some future date which is fixed when the bill is drawn, whilst a cheque is payable at once. A cheque must always be signed by the drawer, whereas a bill may be signed by the drawer or by someone else on the drawer's behalf. Bills are also more formal than cheques and are used for transactions which involve larger sums of money. How does a bill become payable? A bill becomes payable at the maturity date, which is always specified on the bill. A Bill Of Exchange which becomes payable on a certain day is known as a 'dated' or 'specific' bill. Bills may also become payable after a certain period following the date of the bill has elapsed, known as an 'open' or 'uncertain' bill. About the Author True Tamplin, BSc, CEPF® Facebook Linkedin Instagram Twitter Youtube True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists. True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics. To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.