The advance payment business of the bank refers to the behavior that the bank is forced to use its own funds to pay when the customer can't pay the due amount. It often happens when the business is in trouble and the financial situation deteriorates. Advance payment is usually classified as non-performing assets in banks, including bank acceptance bills, letters of credit, bank guarantees, foreign exchange transfer loans, etc.

Account handling of bank advance payment

When the bank advances funds in accordance with the regulations, it shall debit the subjects and credit the relevant subjects; When the bank withdraws the prepaid funds, it shall debit the relevant subjects and credit the subjects. At the end of the period, according to the accrued interest received in advance, debit the account of "interest receivable" and credit the account of "interest income".

At the end of the period, conduct a comprehensive inspection of advances and make reasonable provision for loan losses. It is necessary to find out the reasons for the irrecoverable advance payment. If it is confirmed that it cannot be recovered, it will be classified as bad debt loss, transferred back to the withdrawn loan loss reserve, debited to the loan loss reserve account and credited to the loan loss reserve account.

Once the loan loss reserve is confirmed, it cannot be reversed. This course will make detailed accounting according to the types and objects of some prepayments. The ending debit balance of this account reflects the advance payment made by such users to the bank.