how to handle letter of credit in SAP.
Client is making a PO with a foreign vendor.
Foreign vendor ask for payment through Letter of Cedit i.e vendor approaches his bank and client approaches his bank for an agreement that the payment is make based on the invoice documents received by client bank. Client bank will pay to vendor bank based on the documents received.
At the time of making payment by cliebt bank will take the confirmation from the client for the payment. Then the client bank will pay the amount of invoice and debit the client bank account.