letter of credit

[Former Member]

hi ALL,

who will configure the basic setings for the Letter of credit?

It's the role of SD consultant or FICO?

How can i do the basic configurations of Letter of credit.

thanks

[Former Member]

Dear SK,

[Letter of Credit-|]

[LOC|]

[Letter Of Credit|]

Best Regards,

Amit

Note: Please search on to

[Search Froum|https://www.sdn.sap.com/irj/scn/forumsearch]

[Lakshmipathi]

Dear SK

In many places, it will be dealt with by marketing people as they are the one, who are liaisoning with overseas customers for all issues. So in that way, if they create L/C in SAP, they maintain the relevant datas related to that shipment.

As you would be aware, LC is not just a document in exports; it details as to how an export shipment should be executed against a particular sale order. So the better person will be marketing people.

thanks

G. Lakshmipathi

[Manoj_Mahajan78]

Hi SK,

Below is process of LC

Brief description of LOC:

Letter of Credit: A letter issued by a bank to obtain payment for goods. When a letter of credit is confirmed, the advising bank guarantees payment only if all stipulations in the letter of credit are conformed to exactly.

1.The importer first request a quote for merchandise. This may or may not include transportation and insurance costs.

2.The importer prepares a purchase order based on the offer received from the exporter.

3.The exporter creates a proforma invoice and sends it to importer.

4.The importer opens a letter of credit with the opening bank in the country of import.

5.The opening bank sends the letter of credit to the advising bank in the exporters country.

6.The advising bank advises the exporter that a letter of credit has been opened in his favor.

7.The exporter ships the merchandise in accordance with the terms stipulated in the LOC.

8.The exporter gives the documents proving that the shipment was made in conformance with the LOC to the advising bank.

9.The advising bank pays the exporter based on the documents received.

10.The advising bank transfers the documents to the opening bank and receives payment.

11.The opening bank gives the document to the importer.

12.The importer calculates the duty rates, file the declaration with customs and pays the customs duties within the time frame required by law.

For configuration settings of Letter of credit, you have to go through the documentary Payments - Cockpit, where step by step procedure is given on how to configure documentary payments. The link is given below.

http://help.sap.com/saphelp_470/helpdata/en/75/14e208133a11d3952d0000e83dcfd4/frameset.htm

Regds

MM

Edited by: MANOJ MAHAJAN on Dec 11, 2008 5:41 PM

[Former Member]

Hi,

IMG>SD>Basic Functions>Credit Management/Risk Management>Receivables Risk Management>Define Forms Of Payment Guarantee.

one of the payment guarantees is LOC (payment cards is another)

Regards,

Chandra

[Manoj_Mahajan78]

SK,

I think LC used to be preconfigured by SAP itself.

For more details see below link-

Regds

MM

[Former Member]

Hi,

There are no basic configurations for a LC (VX11N) except if you want to create new text types in the LC or if you want to create a new Financial Document category and type.

Creation of a LC is basically a SD consultants job.

You will only have to enter all the relevant details while creating the LC like its number,relevant baks (opening,negotiating),imp.dates and the details (originals and copies) ofexport documents that are required to be sent with the export invoice.After this this LC has to be assigned in the header of the sales order.