Letter of credit

The letter of credit (L/C) functionality supports maintaining and processing letters of credit from both the seller's and the buyer's perspective.

You can use letters of credit for these types of items:

  • Product
  • Purchased
  • Manufactured
  • Cost
  • Service
Export letter of credit procedure

As a seller, you can use the export letter of credit procedure to maintain these types of letters of credit:

  • Export Letter of Credit
  • Domestic Sales Letter of Credit

Letters of credit of these types must be linked to the sales orders, sales order lines, or contract deliverables for which the letters of credit provide payment.

Import letter of credit procedure

As a buyer, you can use the import letter of credit procedure to maintain these types of letters of credit:

  • Import Letter of Credit
  • Domestic Purchase Letter of Credit

Letters of credit of these types must be linked to purchase orders or purchase order lines.

Authorization

In LN, the letter of credit procedures include various steps. For each step that is completed, you can approve a letter of credit and set a specific status.

To complete a step by setting a status, and to approve a letter of credit up to a specific amount, a user requires authorization.

Letters of credit and order procedures

Letters of credit impact order processing for sales orders, purchase orders, and contract deliverables.

An order or order line linked to a letter of credit can only be approved or released to Warehousing if the linked letter of credit is approved and has the appropriate status.

A contract deliverable linked to a letter of credit can only be activated or released to Warehousing if the linked letter of credit is approved and has the appropriate status.

See Export letter of credit procedure and Import letter of credit procedure.

Multicompany structures

For multilogistic and single financial company structures, you can link order lines from different logistic companies to a letter of credit.

Setup

To use the letters of credit functionality, you must:

  • Activate the concept.
  • Specify whether you use import, export, domestic purchase, or domestic sales letters of credit.
  • Authorize the users involved in the letter of credit process.
  • Specify document compliance failure reasons for the types of letters of credit used in your organization.
  • Specify letter of credit blocking reasons for purchase orders, sales orders, and contract deliverables.

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