Definition: An accepted payment order is a document by which a payer instructs a bank to deposit (freeze) a specific sum in a separate account and to settle with a supplier out of these reserved funds.
How it works
Processing an accepted payment order involves the following steps:
- Depositing funds — the bank withdraws the specified sum from the payer's account and places it in a special deposit account
- Acceptance of the transaction — the bank confirms the funds are available and it's ready to process the payment
- Guaranteed payment — the supplier receives assurance that the money is reserved and will be transferred once the conditions are met
Main areas of use
Communications companies
Payment for telephone, telegraph, and postal services, where advance reservation of funds is required
Transport companies
One-off settlements for freight shipments, especially for large or nonstandard deliveries
Benefits for the parties involved
For the supplier:
- Payment guarantee — the funds are already reserved at the bank
- Reduced credit risk
- The ability to offer discounts when payment is guaranteed
For the buyer:
- The possibility of receiving prepayment discounts
- Confirmation of serious intent
- A simplified settlement process
Documentation
An accepted payment order is filled out on a special form and contains:
- The payer's and payee's details
- The sum to be deposited
- The purpose of the payment
- The conditions for transferring the funds to the supplier
- The payer's signature and seal
- The bank's acceptance stamp
Important: An accepted payment order creates an obligation on the part of the bank, owed to the supplier, to transfer the deposited funds once the conditions for delivering the goods or services are met.
Differences from an ordinary payment order
| Parameter | Ordinary payment order | Accepted payment order |
|---|---|---|
| Moment of withdrawal | Upon execution of the order | Upon acceptance (deposit) |
| Guarantees | Depend on the account balance | Funds are reserved |
| Application | General purpose | Specialized |