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

Similar Messages

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

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?
Thanks,
Datta

Hi,
anyone has the answer to this question?
Thanks.

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

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.

Financial documents/ Letter of Credit and down-payment

Hi,
I try to map requirements from business against solution in SAP.
There is a scenario as follows, where part of the sales order is covered through down-payment. This should be exempted from Letter of credit value.
Example
Sales Order value 1 Mio USD
Down-payment 0.2 Mio USD > paid immediately after sending out the request invoice (request is generated in SD from Sales order). Until payment, this would remain as the net exposure in the system.
LOC value should be only >> 0.8 Mio USD <<
Is there a solution in SAP to this? What would need to happen to enable this?
Cheers
Hein

Hello Hein
Well, for your requirement you have to go development.
For this you can use No credit check in TCode OVA8 for Define Automatic Credit Control for your desired combination of Credit control area, Risk class & Credit group.
Where you have to write a requirement with help of ABAPer.
OR
You can take assistance of FI guy and looking to define Reconciliation Accts Without Credit Management Update
Where In this IMG activity, you can cancel the credit management update function for certain postings by posting to an additional reconciliation account; the reconciliation account without credit management update.
When you make postings to the standard reconciliation account, the receivables total within credit management is then updated, but those postings made to the reconciliation account without credit management update are not.
In Japan, various receivables that are considered certain to be received are excluded from credit management update, including:
- Active prepaid/deferred items
- Payments by letter of credit
Hope this can assist you.
Thanks & Regards
JP

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

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

Letter of credit - Partners

Hi Friends,
When we create Letter of credit(VX11n) we get the option of entering the customer and ship-to party. The system can be configured such that the customer in the letter of credit is checked against the sold-to in the sales order when we attach the LC in the order.
Question: Is there a way that we can enter the payer in the letter of credit and have the payer checked against the sales order payer when entering the LC in the sales order. We have a requirement from the client where the LC should be allowed to be entered in all orders having different sold-to but mapped to the same payer.
Thnaks & Regards,
Saji

Hello,
As far as entering Payer in Letter of Credit (VX11N), system does not check the Partner Function of the Customer. So you can enter the Payer in VX11N.
Now I dont know whether Standard system will give error message if Customer in LC & Payer in Sales Order as different.
Probably, if you want to check the LC Document & Payer of Sales Order, you will have to apply a User Exit - USER_EXIT_SAVE_DOCUMENT, which will check the Payer of Sales Order & Customer of LC & give error message if required.
Hope this helps,
Thanks,
Jignesh Mehta

Letter of Credit mapping in SAP R/3

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,
Velumani

Hi,
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

Letter of Credit-Treasury ECC-6.0

Dear Gurus,
I am am new to SAP treasury and our client has given some basic requirements regarding LC.Excerpts of the mail are as follows:
Opening of trade facilities (L/C, T/T, DP &DA) with the banks
All functionailities should have following features;
- Link in SAP from procurement's P/O or any formed requirements of raw materials and spare parts
- Traceable Reference of L/C or trade documents which may divide into multiple shipments
- Automatic and dynamic update (ie. L/C, forward contract due date) in conjunction with report call date
- Status report (ie. hedged, open position)
- Weekly Planning mode to input and adjust import material plan and revision
- Flexibility to manage on standalone and group basis
Can anybody please help with the basic steps and process for configuration regarding the product types and a broadline process.I know that I have to use Money Market Product types.
Regards
Raju

Hi,
Letter of credit is form of payment guarantee which can be handled in AR/SD Credit Management/Risk Management.
Sales and Distribution
Basic Functions
Credit Management/Risk Management
Receivables Risk Management
Define Forms Of Payment Guarantee
There won't be a letter of credit created in Treasury.
Hedging, open positions (exposure) can be handled under Treasury and Risk Management; tcode THMEX.
Manish

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.
Regards
Rajaram

Hi 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.
Regards
Prasad AV

Letter of credit in import - customization and user steps

Hi
we want to use foreign trade module to track letter of credit in import. we want to track LC status with limits and validity dates.
but in cockpit (ENLO) we are not getting vendor selection. it is only customer selection available.
please let us know how we can create LC document in ENLO for vendor. if anybody has configuration step and user manual please revert.
Thanks & Regards

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

Letter of Credit in FICO configuration

HI,
Plz guide me Letter of Crediti inFICO part configuration steps how to do sned me mail.
Mail Id:[email protected]
Advance Thanks,
abhijeet
Edited by: Abhijeet Walke on Feb 26, 2008 12:24 PM

hi
Hi,
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.
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
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.
nagesh

Letter of credit in purchasing

Dear All
i want to Use Letter of credit for purchase through R/3 please guide me which course should i study or which is document name or book about LOC?
best regards
R.T

the import data view in purchase order is displayed or hided based on customizing
OLME > Foreign trade > control of FT in MM and SD documents > Import views in purchasing documents
And it will not help you, as standard SAP does not support letter of credits in procurement. the functionality is only there for SD.
the basis meaning of LOC is to secure that a vendor gets the money for the material delivered. so he needs this control to avoid that he does overdeliveries for which he will never see the money.
there is nothing for the buying party to see how much of a LOC is already fulflilled. you either do this manually outside SAP, or you have to built your own logic, tables and programs to do it in SAP.
As a workaround you could create contract which has the amount or the LOC, and do call offs against this contract. So you could use SAP standard transactions to monitor how much you have released and how is left on the contract (respective on the LOC)

Letter of Credit Functionality

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