Skip to Content
avatar image
Former Member

Bank guarantee for customers

Hello Experts,

can anyone please share me the complete process of bank guarantee?

I have configuration in fbkp C - G (Customer - guarantee) selected Noted item check box, rel to credit limit check box and posting key comes by default & GL accounts maintained.

In GL master, OIM is maintained.

Created statistical posting in f-38. But unable to clear the noted item in f-28.

Please let me know how to convert the noted item to normal account.

Add comment
10|10000 characters needed characters exceeded

  • Get RSS Feed

2 Answers

  • Best Answer
    Apr 16, 2018 at 04:52 AM

    Hi Former Member

    Bank Gurantee is a letter from the Bank, given by the purchaser to Seller. In this case, you have correctly configured it as a noted item. However, you must also have a process in place, in case you need to encash the Bank gurantee. The accounting flow would be as under:

    1. Recording a bank gurantee. You should use F-37 or F-38 to record it. When you do that, a single line item will be created and it will show as an open item in FBL5N. While booking the bank gurantee, make sure you also specify the target downpayment special GL Indicator. This would help you to book encashment of bank gurantee. You must also specify the target special GL Indicator in FBKP

    2. Now the customer would make a normal payment and you will not encash the bank gurantee. The customer incoming payment would be booked through F-28 or F110 or lockbox. The accounting entry would be:

    Bank Incoming Payment Dr

    To Customer A/c

    3. If however, the customer fails to pay up, you will encash the bank gurantee. You would use F-29 or F110 to do that. In such a case, you should do that with reference to the downpayment request booked in step 1 above. This would create an incoming payment entry as below:

    Bank Gurantee Encashed A/c Dr

    To Customer Special GL (Bank guarantee Encashed)

    This will also reverse the noted item created in step 1 above and you will see that as a cleared item with a single line in FBL5N

    4. If after negotiations, the customer pays up, you will record the incoming payment for customer as below

    Bank Incoming payment A/c Dr

    To Customer

    In such a case you will also reverse the Bank gurantee encashed and pay it back to Customer

    Customer Special GL (Bank Gurantee Encashed) Dr

    To Bank Outgoing payment

    I am hoping that I have been able to clarify your query.


    Sanil Bhandari

    Add comment
    10|10000 characters needed characters exceeded

    • Hi Former Member

      In my earlier response, i had requested you to adhere to rule of engagement. You should be searching a question first and if you do not find a response, please post a new question.You should not keep on posting multiple queries to the same question over and over again.

      Thanks for your understanding.


      Sanil Bhandari

  • Apr 13, 2018 at 08:09 AM

    Are you talking about Down payments (Advance) from the Customer?

    If yes, the noted items to be converted into Down Payment using F-29. This will be done when we receive the down payment from the Customer.

    After posting down payment, you need to clear that down payment using F-39

    Have a check.



    Add comment
    10|10000 characters needed characters exceeded

    • Former Member


      My question regarding bank guarantee. Customer guarantee D G configuration made in fbkp. Please let me know where i have missed.