Credit Management with Letter of Credit.

Hi Gurus,
We need to consider the "Letter of Credit" amout in credit management.
ie. if there is LC created on customer worth Rs. 5lacs, system should not block the sales order unless 5 lacs is consumed.
Pls suggest any workarounds.
Reg.
Amol

Dear Amol Tamhane,
Have not worked on 'letter of credit'.
But if there is any accounting document which gets created due to letter of credit, then you can use the exit for credit management in SALES ORDER LEVEL and write the code to BLOCK THE SALES ORDER ONLY IF
(CREDIT LIMIT + LETTER OF CREDIT AMOUNT ) - (PREVIOUS EXPOSURE + SALES ORDER VALUE ) < 0
You can check BSEG, if accounting document gets created for 'letter of credit' or you can check any tables related to letter of credit based on customer code.
Thanks & Regards,
Hegal K Charles

Similar Messages

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

Credit management activation with letter of credit

Hi Sap guru
I have one queries regarding customer credit limit effect with LC document.
If i creating one LC document for customer after assign to sales order for that perticular customer, it should effect the credit limit of that customer.
In which field it should effect the custmer credit master FD32.
in secured liability field , secured receviable field , or the receviable field .
Can any body tell ,me what is the process of LC attachment with sales order if the credit management is active in company code , and what is the effect in customer credit expouser.
Thanks in advance .
Regards
Anjan Kumar Jha

Hi Anjan
It is the aim of every credit policy to reduce the risk represented by customer receivables.
Along with Credit Management, several other Payment Guarantee Forms within the
business processes are explored. These include letters of credit and payment cards.
These payment guarantee forms differ in the level of security they can offer and are all
integrated within Risk Management.
When a payment guarantee is used (for example, a letter of credit), the system first tries to
provide the optimum in risk minimization. If this is not possible, then Credit Management in
a second step is used to create a credit limit and therefore restrict the level of risk.
Letters of credit are used predominantly for large -scale export transactions, whereas cre dit
while Cards are more important for Retail transactions.
You create a Letter of credit by using VX11 after creating that you assign that in billing tab of sales order in risk Management Financial doc number.
keep in mind the incoterms of Letter of Credit and Sales order should be same.
Reward if helpful
Thanks & Regards
Abhishek Swarup

Credit Management with advance payment

Hi,
We have credit management scenario with advance payment.
In most cases the customer pays an advance. This advance may / may not be against a specific Sales order. At the time of checking the Credit limit, the system has to check the customer advance account as well.
We have 2 types of products u2013 standard (fast moving products) for which there is a min stock defined. There is also a non standard product for which there is no min stock defined.
When a customer places order for standard products & pays an advance against that, this advance may be used to deliver any product in any sales order for standard items. Hence for standard products advance is not linked to a sales order.
However, in case a client places an order for Non standard product & pays an advance against that order then that advance cannot be used to deliver a standard product.
This is to ensure that if advance is paid for non standard profiles, then advance paid against that should not be used to clear orders for standard products.
This can be administered correctly by locking an advance received to specific sales orders. This can be done at the time of receipt of advance & order confirmation.
If this is possible then please suggest step by step configuration.

Hi
If the credit limit is specific to only few customers who pays in advance then you can go with dynamic credit check.
Please go through this link which will help you for configuration
http://help.sap.com/saphelp_erp60_sp/helpdata/en/4d/4653b0cfd70692e10000000a42189b/frameset.htm
Regards
Srinath

How to deal with Letter of Credit in Oracle Payables ??

In case of letter of credit, an 100% advance payment is done to bank, Bank charges its commission,
The letter of credit is for goods imported which is part of inventory. As standard practices of finance, exchange gain/loss and expenses incurred to bring the inventory to its present location and conditions should form part of inventory cost.
This cost are not known at the time of PO, so only purchase price is ascertain.
How to track custom duty paid, insurance, freight, and cargo handling expenses incurred on material.
All this cost should be charged to item and according unit cost should be adjusted.

Well, when are these other costs known? Perhaps you do not know them until you get the invoice from the supplier? Are you then doing match to invoice (either match to PO or match to receipt?)? What version of EBS are you on? My initial off the top of my head though is that when you match the invoice to receipt, the quantity amount should match, but the cost amount would be higher, by the amount of these extra costs. So you would have to be sure you don't have any match tolerance that would prevent such a match. That would get the entire cost charged to inventory, and the unit cost on that invoice is Cost Amount / Quantity. Without knowing anything about your inventory setup, not sure how that would impact you.
Of course, if any of my assumptions are wrong, then my thinking will be wrong. Thus would be helpful to supply additional information about your situation.
John Dickey

Credit Check againt letter of credit.

hi,
This is regarding credit check of sales order against FD. If the letter of credit belongs to company 001 and sales order contains any line items materials other than company 001. It gives an error EI574 "Financial Doc data check result not ok". Is there any way to do credit check ignoring company? I mean financial document will be in one company but sales order items can be from multiple company. Please share your expertise.
Regards
Achuthanandan

Hi Achuthanandan,
if the credit control area is assigned at company code level then this error will appear
if the credit control area is assigned at the sales area level then this error will not come
Regards,
Santosh

Credit management with different sales organization

hi,
one cusotmer master code with different sales area, can i separate the credit limit? pls advice. thanks

Dear Friend,
Pls proceed as follows for implementaing credit control at sales Area level:
1.Define two control Areas e.g C1 & C2 in enterprise structure(Definition)
2.Do not assign the Company code with control area howver keep the "overwrite CC" tab checked (SPRO-Assignement of control area with company code)
3.Assign Sales Area e.g S1 & S2 with control Area C1 & C2
4.Now define credit limit in FD32 for customer in control area C1 & C2
Pls note the control area will be derived automaticaly in case of sales transactions however while posting thru FI control should be a mandatory field in all transactions affecting cutomer ledger balance.you would be required to take help from Fi for this.
Following areas of FI needs changes:
1.Incoming payment & down payments
2.Credit or debit notes
3.Manual clearing of payments with Invoices.
Pls do ask if any other calrification is required.
Regards
Sanjay

Credit Management with AR and SD

Dear FI Gurus,
Please solve my problem.
I am SD consultant and did all the settings for automatic credit control. It was successful. The message used to come that the dynamic credit limit exceeded.Myversion is mySAP2005
After that I went to F-28 and using the cash transactions I posted some payment for one customer and cleared all the outstanding invoices.
After doing this , now whenever I am doing a sales order the credit mgmt is giving the following message for the exceeding of the Credit Limit as follows:
"Check AR summary has exceeded time limit: exceeded by days/hrs"
The system is blocking the document and I am able to release the same.
Problem is that I want the usual message " Dynamic Credit Limit exceeded for this Customer ".
Can you please guide me as to how to get rid off this error. On the SAP Help I got help that was for older versions.
The message no is V1669.
Can someone help me.

Hi,
You got this message because you set check for "Permitted aging of A/R summary" on OVA8. And you also chose to create AR summary on table T000CM.
You can do one of following:
1. on OVA8, make "permitted days and monthes" blank.
2. delelte entries in table T000CM
3. Make "permitted days and monthes" longer, and delete and re-create AR summary by FCV2 and FCV1.
Hope it helps.

Credit Management Query - Transfer of credit limit to other customer.

Hi Team
Can Credit limit can be transfered from one customer to other customer with in same control area ? If so what are the necessary step that has to be taken care (i.e, is Business Approvals mandatory or manually SD Cons can do it ?)
Ex : There are 10 customers in control area 5000.
Customer1 has credit limit has been set to 250 US $ & he has already used 249.99$ , now his credit limit has to be transfered from customer 1 to customer 2 . Is it possible to do this thru T.code VDH1N ?
Please provide your suggestions .
Thanks.
Edited by: Medhaphani on Oct 11, 2011 9:19 AM

Dear Medhaphani ,
First of all, Business approval is MANDATORY for making such changes.
Secondly, the requirement is not feasible as per my knowledge.
One possbility is , imagine we have to transfer the credit limit of customer A to customer B.
There should not be any exposure for both A and B.
Because financial documents have already been created for A and B and hence even if we manage to manipulate the transfer of exposure (using table edit), it will create a mismatch in the accounting during audits.
Hence please wait for more exper opinion on your requirement and ask business to hold this requirement for a while.
Thanks & Regards,
Hegal K Charles

BAPI to create credit memeo with respect to credit memo requset number

Hi Experts,
I am making a credit memo request using t.code VA01. after that a document number is generated. then I make a credit memo using VF01 wrt to doc generated in VA01.
To do it automatically i want to use BAPI for that.But unfortunately i can't able to get the appropriate BAPI for that.
If anybody know the name of the BAPI then please let me know.
Thanks and regards
Pratik

Hi,
I believe It's not there in any of the importing parameters / tables parameters..
But it is there in the exporting parameter SALES_HEADER_OUT.
VALUE(SALES_HEADER_OUT) LIKE BAPISDHD
It is of no use having it in the exporting parameters..
Thanks,
Naren

Risk Management with LoC

Hello Experts
Can anyone pls guide me, whats the _best way to configure risk management with Letter of credit?**_
The scenario is: Automatic credit control is configured for a customer.Now, if this customer gives LC,credit Management should be deacivated.
Now, if we give the LC number in sales order header "Financial doct number", the LC amount will not flow to credit management".
The SOLUTION is, to configure risk management with Letter of credit.
whats the best way to do this?
Regards
Sumanth Gururaj

Hi
Asper myt knowledge you can complete these settings:
MM - Purchasing - Foreign trade /customs - Documentary payments - Basic settings
1. Define a FI document type.
2. Define the Bank Functions
3.Define Indicators for FI documetn. here you can maintainthe controls for FI document process in the order.
4. Define bank indicators.
same path in Relations
1. specify the controls of Banks in FI document
2. Specify the FI document control
Same path in Risk management of FI document
1. Define forms for payment guarantee procedure
2. Define and assign payment gurantee schema
3. Activate documentary payments per itemcategory
I hope it willhelpful.
Regards,
SK

Letter of Credit functionality and Credit Management

Hi,
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?
Example:
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
Hein

Letter Of Credit can be used as a standard solution of SAP GTS with ERP solution. Yes you can connect both SAP & no SAP systems with GTS, but plugins, PI etc needs to be built in. But it would not be real time like RFC works. There are some standard available which needs to be hard coded to meet specific requirements.
Connecting LOC to Sales Order, invoice etc, is manual, based on business specific parameters and it comes standard with SAP GTS. Maintaining Values & Quantity of LOC based on actual LOC from bank is also possible. The depreciation of values & quantities is also standard with in LOC in GTS.
You can also setup various communication methods for LOC.
I think when Invoice is raised and payment is received the LOC should be closed in the system. There can also be other scenarios where in system determines LOC based on predefined logics for determination strategy put in to the GTS system.
Cheers,
Abir

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

Letter of Credit 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

Credit Management with Letter of Credit.

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