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Mar 29, 2011 at 07:55 AM

Letter of Credit functionality and Credit Management



we want to use Letter of Credit functionality for exports.

Currently, we have an ERP system that contains the sales data. In a separate system we have the credit management functionality (Financial Supply Chain Mgt - FSCM).

When order is created, the credit limit is checked in the FSCM system (via PI messages).

Now, we want to link some of the Sales orders with Letter of Credit. I believe, this is standard functionality in GTS.

So when Sales Order is created a LOC should be connected to this.

Can the GTS be connected also to FSCM credit management, so credit limit is not affected?


Sales Order value: 1 Mio USD

10% down-payment > this would be in the credit exposure visible (net exposure).

90 % covered through LOC > credit exposure should showing this, or it shows order value and in a negative figure this amount deducted so no effect on exposure.

Down-payment has no relation to LOC. When money is received for this the net exposure of the sales order is 0.

partial invoice: 0.4 Mio USD > it should be possible to link this invoice to the LOC. The posting FI document should have some LOC information, so when payment comes in the amount in LOC is reduced as well as in credit management this open.

Final invoice 0.5 USD: as above, all values go out from exposure if there are any.

A second case would be guarantees, where there is no reduction of values. This would stay same.

Anyone who can advise a solution here?

Thanks + Regards