Use of Letter of Credit in Sales cycle

[Former Member]

Hi Guru's

Can any one send me or explain me of the letter of credit work process in SAP or sales cycle?

Please Suggest any documentation on it

thanx In advcnce.

[Former Member]

Thanx for valuable sharing such information

[Former Member]

>

> Hi Guru's

>

> Can any one send me or explain me of the letter of credit work process in SAP or sales cycle?

>

>

> Please Suggest any documentation on it

>

> thanx In advcnce.

Hi Prashant,

It is the aim of every credit policy to reduce the risk represented by customer receivables.

Along with Credit Management, several other ‘Payment Guarantee Forms’ within the

business processes are explored. These include letters of credit and payment cards.

These ‘payment guarantee forms’ differ in the level of security they can offer and are all

integrated within Risk Management.

When a payment guarantee is used (for example, a letter of credit), the system first tries to

provide the optimum in risk minimization. If this is not possible, then Credit Management in

a second step is used to create a credit limit and therefore restrict the level of risk.

Letters of credit are used predominantly for large -scale export transactions, whereas cre dit

while Cards are more important for Retail transactions.

You create a Letter of credit by using VX11 after creating that you assign that in billing tab of sales order in risk Management Financial doc number.

keep in mind the incoterms of Letter of Credit and Sales order should be same.

I have a detailed document if you want.

Reward if helpful

Thanks & Regards

Abhishek Swarup

[Former Member]

Hi Abhishek

thanx for sharing such information, Please send me the details documentation on the same, & also can you give over view on Payment card please.

[Former Member]

Can u pl send me also the detailed document of LC on avnesh_kamdar@yahoo.com

Thanks in advance.

Regards,

Avnesh

[Former Member]

>

> Can u pl send me also the detailed document of LC on avnesh_kamdar@yahoo.com

> Thanks in advance.

> Regards,

> Avnesh

Hi Avnesh,

I have sent you the documnetation

Go through it...

Request you to reward points if you find it helpful.

Thanks & Regards

Abhishek Swarup

[Former Member]

>

> Hi Abhishek

>

> thanx for sharing such information, Please send me the details documentation on the same, & also can you give over view on Payment card please.

Hi Prashant,

need your id for sending the doc

Thanks & regards

Abhishek Swarup

[Former Member]

HI Prashant,

here is the overview or payment cards

1. When you create a sales order, you can enter credit card data manually, or copy it from the payer master record. You can enter one card in the sales order overview screen. You are able to enter multiple cards, or multiple authorizations on one card, in the payment card plan in the sales order header. The system automatically authorizes the sales order when you save it.

At a later time, you create the delivery. The authorization may have expired in the meantime, so the system checks to ensure that it is still valid. If the authorization is no longer valid, the system tells you to reinitiate authorization in the sales order. You complete and save the delivery. When all the items are picked, packed, and goods issue is posted,

you create a billing document. Here, payment card data is copied from the sales order, or uploaded directly into the billing document from an external system, as in the case of point of sale. The system uses the authorizations in the payment card plan to calculate billing amounts. You process the billing document and release it to Financial Accounting.

PAYMENT CARD MASTER DATA

To quickly and efficiently process sales orders with payment cards, you can store card data in the payer master record. When you create a sales order, you simply call up a list of cards for the customer using the matchcode on the payment card number field. The system automatically copies the card data into the sales order for the card or cards that you choose from this list.

The one-time customer record is a collective account, in the master record, for a group of unrelated customers. For this reason, you cannot maintain payment card data for one-time customers.

Features

You can enter the following card information in the payer master record:

• Card type, for example VISA, MC, or AMEX

• Card number

The system checks the card numbers you enter to ensure that they correspond to the numbering standards of the relevant payment card company (for example, checking to make sure that a Visa card number begins with "4").This reduces the risk of having to go through a lengthy authorization process in the sales order with an incorrect card number.

The system also checks to ensure that a payment card belongs to only one customer. You cannot enter one payment card in two different master records.

• Expiration date

• Cardholder or company name as it appears on the card

• Card category, such as credit card, customer card, or purchasing card

• Blocking reason

If required, you can block the payment card by entering a reason, for example 01 for "card stolen". You maintain blocking reasons in Customizing for payment cards in the Billing section of the IMG.

Note

A block is for a particular payment card only. If one of the customer's payment cards is blocked, he or she may use another.

Also, a block does not effect sales documents that have already been created with the card. You can, however, run a standard search to determine all documents in which the card number is used.

• Card valid-from date

• Default card

You can assign a default card if there is more than one card for a customer. When you call up a list of cards for the customer in the sales order, this card is highlighted.

Hope this will be helpful...

Request you to reward points if helpful.

Thanks & regards

Abhishek Swarup

[Former Member]

Hai Abhishek

Please send it to s_prashantd@yahoo.co.in

[Former Member]

Hi Abhishek,

We are trying to setup LC credit check in the SD. Would you please document you mentioned in the thread.

Thanks.

Removed by Moderator Please dont deviate the forum rules by asking to share the information to personal mail id

Edited by: Lakshmipathi on May 22, 2010 6:33 PM

[Lakshmipathi]

Dear Prashant

In export sales, letter of credit will be used where the importer will give guarateee through their bankers to exporter's bankers that payment will be credited once the terms and conditions of the contract is in line with the agreed terms.

To create LC, use VX11N and once giving all datas there and save, a reference number will be generated. This reference number while creating sale order, you have to assign it by choosing Go to -> Header -> Billing where there is a field called "Financial doc. no.".

For more information on Letter of credit, go through the link

[Export Involving a Letter of Credit |http://help.sap.com/saphelp_46c/helpdata/en/a2/28abc7abc311d395750000e83dcfd4/frameset.htm]

Thanks

G. Lakshmipathi