Letter of Credit Process in SAP
Hi Guru's
Can any one send me or explain me the letter of credit process in SAP or sales cycle?
please send step by step configuration or documentation on the above process.
my mail id is [email protected]
Suitable points will be rewarded.
thanking you in advance for your kind help.
Thanks n Regards
Toshniwal
Hi,
Please find the Letter of credit details
The configuration is as follows - OVFD, Define and assign payment guarantee, OBYN,OBYH, and OBYK. It is properly working.
I made all the required transaction VX11N, VXA2, F-36, F-34, F-20
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.
Hope this will be useful
Reward points if helpful to you.
Bye
Anil
Similar Messages
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Letter of credit Process in Credit management for Customer/Vendor.
Dear Team
I am in need of some information on Letter of credit Process in Credit management for Customer/Vendor
If you have any information with examples on the same Pelase provide me the same.
Thanks
Mehda.dear friend,
please look here:
http://help.sap.com/saphelp_47x200/helpdata/EN/2a/30b746b1d511d194f300a0c9306794/frameset.htm
good luck! -
Letter of Credit Facility in SAP
Dear All
My client has a requirement of mapping the Letter of Credit facility in SAP. Their reqmt is that based on the project or contract they will get a LC availability, then after using the LC , they need a report to show, how much is the available facility, used LC and the balance per bank. I hope this can be done in treasury Mgmt. Plz let me know the config aswel for this and the difficulty in on config this.
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RajaramHi Rajaram,
There is no default product type for LC in TRM. ALways you can map the functionality to available product categories in Money Market area under Product Category - 550 or so and can have a integration with Facility product where you can monitor the available/used fund status.
You need to configure both Product types in Money Market area of TRM.
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How to configure Letter of Credit in SAP FI. we dont have TRM as of now.
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SKDear,
no matter process will be same,
1. Create Special GL for vendor with Note Item selected in its proporties in transction FBKP.
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Lettter of Credit is only for information so they will not update any balance in the vendor account.
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Hi all,
Scenario is:
Import PO is raised to a vendor
Based on the PO Letter of Credit is issued to the vendor for partial quantity.
Based on the Letter of Credit, the vendor will supply the goods for which the L/C is opened.
Then the Customs duty is paid and GR is done.
How to map this scenario in SAP? How to map the L/C in SAP. How to create link between L/C, PO, GR & customs duty.
Please give your inputs.
Regards,
VelumaniHi,
After the PO has been created in SAP, from the finance side, they will post LC the functionality is similar to bill of exchange or as a noted item. While posting the transaction, in the reference field PO number will be maintained.
Once the Goods are received at port.
Customs duties has to be paid, for this you have to post an invoice through tcode: MIRO for the customs clearing agent with reference to your PO(For customs duties you have to maintain appropriate condition types in PO and against these condition types, custom clearing agents number(vendor number) has to be maintained. All these condition types are to be created with condition category 'delivery costs').
For imports PO -- GR based-IV should not be checked becoz before receiving the goods you have to clear the custom duties.
Then once the goods are received you will post the GR and the you will post the invoice for the material vendor.
Then from the finance side, they will clear, whenever they post the clearing transaction to the vendor, LC realted transaction gets reversed automatically. Bank account will be -ve and your vendor account will be +ve.
Note: Tracking of LC has to be done manually as the functionality is not complete in SAP.
Hope this clarifies.
Thanks,
Viswanath -
Total Letter of Credit Process
Hi,
We need to implement Letter of Credit (LC) for one of our client. It is export/import business company.
Can we configure Letter of Credit in Fi or we have to go for another module for LC process.
And our client needs LC number in all the entrie process like LC number in Sales order, delivery note challan etc.
SateeshHi
Thru TC-F-57 we can create letter of credit details as a noted item., which will gnerate a document with single line item.But once your LC is closed i.e payment to vendor is made we need to clear this noted item also.But how to clear pl. explain.
Shivaji -
Letter of Credit management in SAP Business one
Hi All,
One of our customer wants to manage the "Letter of Credit" used in exporting their product to different countries. They need to record it, discount it from bank, record bank charges and close it when their customer repays the amount. Also need to reconcile it through bank reconciliation. Is there any solution available (as an add-on or work around)?
Thanks and regards
Ajith G.Hi Peter,
We are using India localization and the Bill of exchange is not available in that. But after reviewing the functionality, we found that it is a very good workaround solution for our customer. Now my question is whether this facility will be added for India localization in the next version of SAP Business One?
In addition to that we are discussing with another prospect who is actually doing cross-border trade. He is satisfied with all other aspects of Business one. Only problem is that he wants to generate all documentations related to his trade to be generated from Business one. Is this possible or any add-on available?
Regards
Ajith G
Edited by: Ajith G on Jun 29, 2009 12:04 PM -
Letter of credit management using SAP business one
Hi Experts,
One of our customer wants to manage the "Letter of Credit" used in exporting their product to different countries. They need to record it, discount it from bank, record bank charges and close it when their customer repays the amount. Also need to reconcile it through bank reconciliation. Is there any solution available (as an add-on or work around)?
Thanks and regards
Ajith G.Hi Ajith,
Please refer to SAP note 1028874
Regards
Jambulingam.P -
LC (Letter of Credit) Processing
Dear Sirs,
I have created a LC using VX11n and assigned the LC number to a Sales order. But, I am not able to see the reduction in LC Value / utilization in the LC report - VXA2.
Can anyone suggests how LC is consumed and where can I see the report of the pending value of LC?
Regards,
Rajni.Dear GSL,
LC is assigned in both header as well as Item Level, still there is no reduction of value in VXA2.
Can you please suggest, what could be the other solutions? Do we need to Activate Credit Control Area to take this into effect?
Regards, -
Dear colleagues:
We are about to implement the u201CRisk Management u2013 Letter of Credit Processingu201D functionality (from the importeru2019s view). As an importer we need to assign some other charges to the LC (e.g. custom expenses), with various due dates. These expenses should update cash management. I suppose this connection between LC and other expenses must occur in the purchase order. If yes, please inform me how we implement it. If no, please inform me with the correct solution. We use version ECC 6.0
Thank you in advance.Hi,
I beleive that, the Letter of Credit Processing is out of SAP Scope as of now.
All LC Charges you have to post manually or Z Object / Customiged Object to be developed for tracking the LC Expences and those values to be used for manual FI JV.
Regards
VG -
Letter of Credit Additional Charges
Dear colleagues:
We are about to implement the u201CRisk Management u2013 Letter of Credit Processingu201D functionality (from the importeru2019s view). As an importer we need to assign some other charges to the LC (e.g. custom expenses), with various due dates. These expenses should update cash management. I suppose this connection between LC and other expenses must occur in the purchase order. If yes, please inform me how we implement it. If no, please inform me with the correct solution. We use version ECC 6.0.
Thank you in advance.Hi,
I beleive that, the Letter of Credit Processing is out of SAP Scope as of now.
All LC Charges you have to post manually or Z Object / Customiged Object to be developed for tracking the LC Expences and those values to be used for manual FI JV.
Regards
VG -
Purchase with Letter of Credit
Hi Experts..
Can we manage purchase transaction with letter of credit in SAP Business One?
Thank you.Hi ,
Check below threads:
Letter of credit management using SAP business one
Re: Letter of Credit management in SAP Business one
Hope this willhelp you.
Thanks,
Neetu -
Letter Of Credit - Determination strategy
Hi Gurus
i am trying to Maintain Determination strategy from GTS area Menu-->Risk Management-->Letter of Credit Processing-->Maintain Determination strategy
I have create Legal regulation as Z1LOC and all other Configurations maintained
now i am getting error
No numbering scheme could be determined for legal regulation Z1LOC"
i dont see any Number range schema for LOC
Could you please let me know which setting i am missing
thanks
sarvanHi Sarvan,
For some reason, the system is trying to find a Numbering Scheme for Legal Control. The best workaround will be to make an entry in the control table without necessarily making any assignments,
In IMGpath (GTS 10.0):
Global Trade Services >
General Settings >
Numbering Schemes >
Assign Numbering Schemes to Legal Regulations of the Application Areas
Choose level: Assign Scheme for Numbers in Legal Control, and add an entry for your Legal Regulation Z1LOC. Hopefully that should sort it out.
Regards,
Dave -
Letter Of Credit Implementations
Hi gurus,
If it is possible can you explain me where ı can manage general letter of credit implementations at SAP;including the relationships with the banks regarding to the letter of credits and the links between foreign trade (swifts,correspondings,import etc.)
Thanks in advance.
Best regards.Link below may be of use to you.
https://www.sdn.sap.com/irj/sdn/wiki?path=/display/profile/letterofCredit -
Letter of Credit in Sales return process/
Hi All,
This issue is related to Letter of Credit, I created a sales order and maintained Financial document in Billing Tab (Letter of Credit) & saved the sales order and the balance of LOC is updated, i created Delivery & Invoice also . Later stage the customer returned the materials and we Created the return sales order but the letter of Credit open value is not increasing or not Crediting.
Please let us know in case of return process weather the LOC or Financial document will credit or not?
RegardsHi
Letter of Credit is used in credit management as one of the tool for Risk management. In case of return process LOC or financial document wont get credited as LOC is for intimation to the customer if the risk level has come to high.Also run the t.code VXDG.
Please check the below link which may help you
http://help.sap.com/printdocu/core/Print46c/en/data/pdf/SDFTLOC/SDFTLOC.pdf
Regards
Srinath
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