Skip to Content
avatar image
Former Member

credit note in an LC transaction

I have a dilemma in applying the credit note in an LC transaction? This is my first time to encounter this type transaction. How it is done? Hoping for your quick reply. Thanks!

Add comment
10|10000 characters needed characters exceeded

  • Get RSS Feed

1 Answer

  • Feb 17, 2014 at 02:48 PM

    We normally issue credit note against any rejections from end customer and this being the case, I am at a loss to understand your requirement. Can you explain the Business process as to why you are looking for LC functionality in Credit Note process?  I am sure, you should be knowing what is L/C means, how it works. 

    G. Lakshmipathi

    Add comment
    10|10000 characters needed characters exceeded

    • but how will the bank record it against the LC

      Though this is out of scope from SAP point of view😉, from my experience what I can tell you is your bankers would not adjust any value against this processed L/C.  It is now between you (Buyer) and the Seller to decide how they are going to settle you.  If the supplier is regularly supplying to you, then couple of options are there:-

      • Give a credit note and adjust against future supplies
      • Give free of charge delivery

      If you prefer the first option, then when you receive the next shipment, you can release the payment less the credit note value.  If you prefer the second option, it is upto buyer who are suppose to despatch the goods on free of charge.  Of course, for both these cases, you can negotiate with your buyer that the shipment should be executed against non-L/C terms.  You need to have a detailed discussion with your Top Management and arrive at a mutual conclusion.

      G. Lakshmipathi