Letter of credit functionality for imports

Hi Experts
W.r.t FT, the financial document can be used as LC.
1) Is it possible to use this LC (Financial doc- Transaction VX11N) for linking the import purchase order?
2) Is there any standard functionality to monitor the import purchase orders which involve Letter of credit?
3) Is there any userexit to enhance the existing VX11N to make use for import purchase order?
warm regards
marias

Hello Marias,
I regret to inform you that the functionality you request is not
implemented in the standard system within the Foriegn trade area.
" The documentary payment functionality (Letter of Credit) for vendors
is not available in SAP Standard System.
Documentary payments can only be created on the SD side for customer
but not for vendors.
At this time, there is no plan to develop this functionality. "
Please note that the Foriegn Trade functionality has been expanded and
is available in the solution product "Global Trade Services" (GTS).
As you are probably already aware information on GTS is available in SAP
Service Marketplace.
Regards,
Alex

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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 usage for Cross Company Code - sales

Dear All,
Is is possible that we can use L/C Letter of Credit document for cross company code sales processing.
client have created LC document for Company A which can also be utilized for Company B.
Thanks,

HI,
I'm also interested in Cross Company Code Finacial Documents & revolving letter of credit.

Bank Guarantee & Letter of Credit Functionality

Hi,
Do you idea about in which Oracle Module Bank Guarantee & Letter of Credit Functionality is Covered?
Is it covered under Oracle Treasury?
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Hi,
anyone has the answer to this question?
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Letter of credit maintenance for order and delivery documents

Hi Friends,
As there are three places where we can maintain Letter of Credit ( Financial documents) data.as
1. Order Header data
2. Order Item data
3. Delivery Header data
What is the importance of all these and ideally where shd maintain ?
kindly guide
Shailesh

Hi,
Process Of Letter of Credit for Imports
1. The Clearing agent ask for amount, the person who receive the product will give Letter of Authority to Clearing Agent. The clearing agent move to bank and take check.
For this purpose, we just issue LA.
2. Prepare Purchase for the Vendor from whom we are going to receive the product. There may be 2 or more Vendors.
1. Product cost to be transferred to Vendor A
2. Freight or Other Charges to Vendor B
3. Customs Duty and Others to Vendor C
Tcode : Me21n
3. First We have to pay Customs Duty to Commissioner of Customs after LA issued.
Entry : Customs Clearing a/c Dr
Cess on Custom a/c Dr
CVD Clearing a/c Dr
Cess on CVD a/c Dr
Special CVD a/c Dr
Vendor C a/c Cr.
T-code :MIRO or YMIROOTH
4. Cenvat credit for the product will be taken by person who handling Excise in that company
Entry : Cenvat Clearing a/c Cr.
RG23A Part II a/c Dr.
5. Clearing of Cenvat Credit
Entry : Cenvat Clearing a/c Dr.
CVD clearing a/c Cr.
Cess on CVD a/c Cr.
Special CVD a/c Cr.
6. After Bank payment they will transfter to us
Entry : Vendor a/c - Dr.
Bank a/c - Cr.
Give ur mail id.. i will send the doc. its not easy to make u understand that concept.
Regards
Srikanthraj

Letter of Credit Functionality

Hi
We are implementing Oracle E-Business Suite for a Govt of India Organization on Release 12.1.3 Can anyone let me know if there is an inbuilt functionality for Letter of Credit Scenario in R12. to my knowledge it is not available in 11i
Regards
Anand S.

Hello Marias,
I regret to inform you that the functionality you request is not
implemented in the standard system within the Foriegn trade area.
" The documentary payment functionality (Letter of Credit) for vendors
is not available in SAP Standard System.
Documentary payments can only be created on the SD side for customer
but not for vendors.
At this time, there is no plan to develop this functionality. "
Please note that the Foriegn Trade functionality has been expanded and
is available in the solution product "Global Trade Services" (GTS).
As you are probably already aware information on GTS is available in SAP
Service Marketplace.
Regards,
Alex

Letter of Credit (LC) for vendor payments

Hi,
We have a case where a single LC will be raised at the time of creation of purchase order. The vendor will send invoices at regular intervals. We will need to clear the invoices against the single LC created.
How will we do this in SAP and how can we track the LC and the balance in the LC after a particular period.
My understanding is that a LC will be raised for a single vendor invoice and not for multiple invoices.
Please clarify.
Thanks.
Sembian

Hi,
Sorry i guess my question is not clear. It is not to link any LC with PO
The client will raise a single LC against any import vendor. Since these are large CAPEX related purchases, the vendor will send multiple invoices. The bank will adjust the LC against the invoices. Post adjustment the bank will send th advice to the company.
My question was how we can adjust multiple invoices against a single LC
THanks
Sembian

Materials Management: Letter Of Credit for Vendor in SAP ECC 6.0

Hello Experts,
We are in the process of implementing SAP GTM for our Client.
One of Our Prime requirement is to map Financial Document "Letter Of Credit" for the Vendor in case Imports. I found that Letter Of Credit can be created only for Customer in Sales/Foreign Trade but the same option is not available for Vendor.
Does sap support Letter Of Credit in MM-Imports or in Finance for Vendors?
Thanks & Regards,
Ganesh

Hello Debasis,
Post EPC installation,you need to perform configuration of EPC through portal.You can see it listed under configuration--> configuration scenarios-->EPC.
During configuration you will be asked to define path of you primavera installation and a user on that system with sufficient permissions. This user is called APS user.
Try to do a mock configuration run on sandbox/dev system and then you can follow the guide.
Regards,
Hetal

Import Leter of credit

Hello peers,
can any one tell me the configuration steps for LC process in SAP. pls am struck in middle.
Thanks
Murali

Hi,
Import Process Involving a Letter of Credit
You (the importer) first request a quote for the merchandise. This may or may not include transportation and insurance costs.
You prepare a purchase order based on the offer received from the exporter.
The exporter creates a pro forma invoice and sends it to you.
You open a letter of credit with the opening bank in the country of import.
This involves advising the bank of the documents required from the exporter. As an importer, you not only need the documents required by customs, but also the documents that are required by any other agency regulating your commodity. These may include
Bills of lading
Commercial invoice
Export packing list
Shipper's Export Declaration (SED) (Required in the USA for goods valued at $2501 or more)
Shipper's Letter of Instructions (SLI) (applies only to the USA)
Single Administrative Document (SAD) (applies only to the EU)
Certificate of Origin
Insurance certificates
Licenses (when necessary)
Using the SAP FT application, you can create the letter of credit yourself before contacting the opening bank. Other than insurance certificates, you can also create the documents listed above using FT.
The opening bank sends the letter of credit to the advising bank in the exporter's country.
The advising bank advises the exporter that a letter of credit has been opened in his favor.
The exporter ships the merchandise in accordance with the terms stipulated in the letter of credit.
The exporter gives the documents proving that the shipment was made in conformance with the letter of credit to the advising bank.
The advising bank pays the exporter based on the documents received.
The advising bank transfers the documents to the opening bank and receives payment.
The opening bank gives the documents to you (the importer).
You calculate the duty rates, file the declaration with customs and pay the customs duties within the time frame required by law.
Hope this helps you.
Rgds
Manish

Letter of credit in retail

Hi all,
I wonder why letter of credit functionality is not applicable for Retail system ( external vendor PO) ?
as the following link said that its not applicable to apply LC in retail without mentioning the reason why it's not applicable:
Standard Functions Not Supported in SAP Retail - Basic Principles - SAP Library
and if there is some workaround to apply the procedure of LC (external vendor PO)
Thanks in advance,

sap has confirm that this functionality is not available for import hence not possible in sap.

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

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.
Sateesh

Hi
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 on Sales

Hello Guru's,
We have the following requirement:
In Perú, apart from the Invoice Document I need to give to the customer some Letter of Credits (LOC) that represent the 100% of the invoice value. The customer or bank will make the payment to us clearing the letter of credit, not the invoice. So I need to create a process that reverse the invoice and create n letter of credit assigned to the original invoice for the customer. Depending on the payment terms I can have 3 letters of credit for 1 invoice.
Example:
1.     Sales Order 1: Net value 900 USD (Payment terms 90 days)
This sales order must have assigned 3 letters of credit that sum the total sales order amount (900 USD):
a.     Letter of Credit 1: Net Value: 300 USD, payment terms 30 days
b.     Letter of Credit 2: Net Value: 300 USD, payment terms 60 days
c.     Letter of Credit 3: Net Value: 300 USD, payment terms 90 days
2.     Invoice 1 Net value 900 USD (Payment terms 90 days)
Accounting Document Invoice 1:
                        D           H
Customer Account       12XXXXX1                                 990
VAT              4XXXXXXX                90
Sales              7XXXXXXX                900
Actually the following documents are created automatically after invoice creation according to the Letter of credit parameters set in sales order. (This process is done in their actual legacy, not in SAP, we need to replicate the process in SAP)
Accounting document Letter of credit 1:
Letter of Credit account        12XXXXX2               330
Customer Account                12XXXXX1              330
Accounting document Letter of credit 2:
Letter of Credit account        12XXXXX2               330
Customer Account                12XXXXX1              330
Accounting document Letter of credit 3:
Letter of Credit account        12XXXXX2               330
Customer Account                12XXXXX1              330
To sum up: For this example the system must create 4 documents during invoice process.
A.      Invoice 1 for 990 USD
B.     Letter of Credit 1 for 330 USD
C.     Letter of Credit 2 for 330 USD
D.     Letter of Credit 3 for 330 USD
All the documents impression will be sent to the customer. They create Letter of Credits to replace the invoice because legally there are more secure for payment. The payment of the customer must clear the Letter of Credit (The Customer account of the invoice were cleared by the letter of credit)
What solution do you recommend for this requirement? I was thinking to develop a USER EXIT on accounting document invoice creation to create additional FI documents for the LOCs required.
Thanks for your help.
Best Regards,
Pablo

Hello Pablo,
I had the same situation in Chile. I had to make the procedure manually because:
- I could not determine with which Banks I was going to use for the LoC
- I don't know the amount to be paid in each LoC
- I don't know the payment terms for each LoC.
- The LoC currency was not always the same
If you solve these problems, may be a Z report which reads the Payment Method and a BAPI for GL document creation could help you, but its very complex.
Kind Regards

How to do custom miro for import purchase ?

Hi All
I want to know what is the process for doing custom miro for import purchase, In my case for some of the excise elements we get credit, so while doing miro how to take care of this ?
Thanks Rashid.

Hi,
CVD Account has to be enter in Co cd setting and Excise default setting as per your Tax procedure if it isTAXINJ then JMOD as default excise value for CVD there fore system identifies the CVD as BED( Basic excise) which you can avail credit.
1.Basic customs duty (JCDB) 10% - Material cost
2.Education Cess on BCD(JEDB )-2% - Material cost
3.Secondary edu cess on BCD(JHCS )-1% - Material cost
4.CVD (JCV1)-- Credit
5.EDU CESS FOR cvd-2% - Credit
6.SHE Cess on CVD(J1CV )-1% - Credit
7.Add duty of customs(JADC) 4% - Credit
Cycle for Import PO
Import Purchase order: In PO you have to maintain the Custom duties
1Customs duty (JCDB) 10%
2Cess on BCD (JEDB)-2%
3Secondary edu cess on BCD (JHCS)-1%
4.CVD (JCV1)
5.EDU CESS FOR cvd-2%
6.SHE Cess on CVD(J1CV )-1%
7.Add duty of customs(JADC) 4%
You have to enter local custom vendor for above condition type in PO, One main or material vendor which you enter at the top of the PO
Then against the 7 condition types the customs (Local) vendor should be given (i-e) you have to select the condition type then click on the lens icon & give the customs vendor,
And should have zero tax code in PO
2 MIRO for Custom Vendor by selecting planned delivery cost.
3. Capture Excise Invoice against Commercial invoice (MIRO document no)- J1IEX
4. MIGO u2013Goods receipt
5. Post Excise Invoice- J1IEX
6. MIRO for Import Vendor
7. Final payment

Letter of Credit in sales cycle

Hello experts,
I have the following scenario:
Apart from the Invoice Document I need to give to the customer some Letter of Credits (LOC) that represent the 100% of the invoice value. The customer will pay the letter of credit, not the invoice. So I need to create a process that reverse the invoice and create n letter of credit assigned to the original invoice for the customer. Depending on the payment terms I can have 3 letter of credit for an invoice.
What about the Documentary payment (SD-FT-LOC) in SAP? Can I use VX11 to create LOCs and then assing n LOCs to 1 invoice? I was thinking to develop a USER EXIT on invoice cancelation to create, apart the standard FI document invoice cancelation, the additional FI documents for the LOCs required.
Thank for your help.
Best Regards,
Pablo

Hello G. Lakshmipathi,
The scenario is the following:
Apart from the Invoice Document I need to give to the customer some Letter of Credits (LOC) that represent the 100% of the invoice value. The customer or bank will make the payment to us clearing the letter of credit, not the invoice. So I need to create a process that reverse the invoice and create n° LOCs assigned to the original invoice for the customer. Depending on the payment terms I can have 3 letters of credit for 1 invoice.
Example:
1.     Sales Order 1: Net value 900 USD (Payment terms 90 days)
This sales order must have assigned 3 letters of credit that sum the total sales order amount (900 USD):
a.     Letter of Credit 1: Net Value: 300 USD, payment terms 30 days
b.     Letter of Credit 2: Net Value: 300 USD, payment terms 60 days
c.     Letter of Credit 3: Net Value: 300 USD, payment terms 90 days
2.     Invoice 1 Net value 900 USD (Payment terms 90 days)
Accounting Document Invoice 1:
                                                                                D                    H
Customer Account       12XXXXX1                         990
VAT              4XXXXXXX                   90
Sales              7XXXXXXX                  900
Actually the following documents are created automatically after invoice creation according to the Letter of credit parameters set in sales order. (This process is done in their actual legacy, not in SAP, we need to replicate the process in SAP)
Accounting document Letter of credit 1:
Letter of Credit account        12XXXXX2     330
Customer Account                12XXXXX1              330
Accounting document Letter of credit 2:
Letter of Credit account        12XXXXX2     330
Customer Account                12XXXXX1              330
Accounting document Letter of credit 3:
Letter of Credit account        12XXXXX2     330
Customer Account                12XXXXX1              330
To sum up: For this example the system must create 4 documents during invoice process.
A.      Invoice 1 for 990 USD
B.     Letter of Credit 1 for 330 USD
C.     Letter of Credit 2 for 330 USD
D.     Letter of Credit 3 for 330 USD
What solution do you recommend for this requirement?
Thanks for your help!
Best Regards,
Pablo

Letter of credit functionality for imports

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