Letters of credit

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.

Letter of credit setup

To use the letters of credit functionality, you must activate the concept and specify whether you use import, export, domestic purchase, or domestic sales letters of credit.

You must also authorize the users involved in the letter of credit process.

For purchase orders, sales orders, and contract deliverables, you must set up reason codes for non-compliance with conditions specified for the applicable letters of credit.

Procedures

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

Export
Domestic Outbound

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

Import
Domestic Inbound

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.

Different sets of statuses are available for the import and export procedures.

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

Validate command and advance payments or installment amounts

A new Validate command has been added for letters of credit. If you click this command, a report is printed that shows which fields must be filled prior to approval. If all fields are filled, the Validate command is disabled.

Additionally, advance payments or installment amounts, which may be paid prior to shipment, could not be excluded from the letter of credit check. Now, these fields have been added to the Letter of Credit:

Exclude Advances
Exclude Installments
Fields that show the advance and installment amounts that are excluded

Because contract deliverables and purchase orders do not have advance payments, the new fields are applicable only for sales orders.