Lc config document

Hi
    wat is lc i.e., letter of credit;provide step by step configuration
Thanks in advance
Arpitha

Dear Arpitha
In export scenario, different types of Payment Terms are used.  One among them is Letter of Credit.  A letter of credit is a document issued by buyers bank in favour of exporters' bank
The LC will be the source of payment for a transaction, for deals between a supplier in one country and a customer in another country. 
Once despatch is made by the exporter, they will submit all negotiating documents as stipulated in L/C to their bankers, who in turn, will send the same to buyers' bank for payment.  The buyers bank will scrutinize all these documents and ensure that the conditions are adhered to, by the exporter.  If the negotiable documents are in line with the conditions stipulated in L/C, they will honour payment to exporters' bank account.
In SAP, we have to create this L/C in VX11N.  After giving all the required datas, a reference number will be displayed at the bottom screen.  Make a note of this and assign this reference in sale order header level Billing tab where you can see a field [Financial doc no]
thanks
G. Lakshmipathi

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