Bills of Exchange is a document giving a strict order to the buyer to release fund on or before said time.
Fig: Exporter giving a strict order to an importer
I have written an advance level article on Bills of Exchange on https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=8042&kw=How-to-make-your-International-Export-Import-Business-Transaction-SAFE-AND-SECURE
Exporters generally prepare bills of exchange on a word file.
See. 
In Bills of Exchange which exporters prepare it has his own signature in it, space is left for importers signature as well
How it works ?
1. Bills of Exchange prepared by the exporter and provided to his bank.
2. Exporters bank send it to importers bank
3. Before collecting the documents, importers have to sign bills of exchange. without bills of exchange signature, importer cant collect docs & goods.
4. Once the signature is done it would be provided back to exporters bank & exporter will receive signed bills of exchange.
[It would be proof that importer has accepted the order to pay on or before the due date]
Q. On which payment terms this Bills of Exchange are useful?
A. Bills of Exchange could be provided to any banking terms like DP / DA / LC but its most useful for DA terms because in DA importer can collect the BL & Docs from the bank and he needs to pay after some usance period.
Q. Do bank takes guarantee of payment in DA ?
A. No, Bank only takes guarantee on LC payment terms, in DA or DP we need to keep ourself safe via purchasing ECGC cover.
Q. Suppose if we receive Bills of Exchange on DA terms with usance period of 7 days & importer also signed bills of exchange, we also receive Bills of Exchange with his signature, & even he did not pay after 7 days to our bank, then what we can do?
A. Signing Bills of Exchange and not providing payment is a big fraud, the importer can be sent to jail easily. but no worries, we already have ECGC cover , show bills of exchange to them and proceed for your claim. Generally a fraud buyer will not collect the docs if he finds that you have also sent a bills of exchange with other documents set. Even in case of non acceptance, ECGC would help.
Q. Do buyer ask us to send bills of exchange with other documents ?
A. No buyer will ask you to send bills of exchange , but still you need to send with other documents
Q. What Docs generally buyer ask exporter to send it via bank ?
A. It depends on buyer but in most cases we find : Invoice , Packing List, Certificate of Origine, Phytosanitary Certificate & Bill of Lading.
but dont forget to add Bills of Exchange from your side in DP / DA or LC.
Q. Should we talk to the buyer that we will send you bills of exchange?
A. It is good to talk everying in advance , with his PO we should also ask for his NOC, get his PO get it ECGC verified , go for DP/DA/LC without worry.... with ECGC & Bills of Exchange