Letter Of Credit Thru GTS

Hello Guru's:
1. Can anyone give me a over view of Business Process specific for LOC from Export and Import side?
2. How can it be handled thru SAP GTS and SAP ECC?
Thanks

Please go through the help.sap documents. You can find most of the required information in it.
Export Process - LOC : Sales Order -> Order blocked if LOC required -> Maintain LOC in GTS -> Assign SO to LOC in GTS -> PGI & state to the bank where LOC is created -> Payment by LOC confirming bank -> close LOC in GTS
Import Process - LOC : Purchase order (Terms of payment etc) -> Request to Open LOC with Bank -> Open LOC & maintain in GTS -> LOC received and activated -> GR -> Payment -> Documents forwarded to bank -> Confirmation given by importer bank
Kindly cross check with country specific laws for LOC or your finance team members. The above mentioned steps be handled through SAP ECC and SAP GTS.
Cheers,
Abir

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Letter of Credit SPL Screening in GTS

Hi,
I want to perform SPL screening of banks on the letter of credit documents created in ECC.
What document type in ECC to corresponding doc type in GTS
How can I achieve that? Can anybody throw some light on this?
Thanks,

Please refer to the topic 'Integrating SPL Screening with Financial Accounting' in the customizing documents for details.

Re: Letter of Credit - Imports

Hello,
I want to map the process of letter of credit in case of imports in SAP.
What the process is, we are making an import PO. Bank opens LC in equal to the invoice amount. We have to pay margin money i.e 25percent of invoice amount to the bank, in turn, bank opens the LC of 75percent of invoice amount. We are capturing the payment of margin money at 25percent in SAP.
The point is, bank is giving the facility of 75percent for 90 days. I dont know how to map this scenario in SAP?
Regards,
SDN_Creature
Edited by: sdn_creature on Mar 18, 2009 8:14 AM
Edited by: sdn_creature on Mar 18, 2009 2:46 PM

hi we doing like below
we are created one special g/l indicato for letter of credits after that posted trhu f-40 letter of credits credit and vendor debit here we posted first line item only and after that thru process open items we are selected that vendor item and posted after that at the time of payment thru f-53 we have cleared here we are enterd vendor number and special g/l indicator, bank outgoing account after that we have selected that line items and posted i think it will be helpful.
Regards,
Nauma.

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 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

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 - 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
sarvan

Hi 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 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

Statistical Special GL indicator Letter of Credit

Dear Gurus,
I have maintained L/C as statistical Special GL indicator.
i find that when entry is posted using L/c as the Special GL indicator, the Vendor / customer balance gets updated by the same in account balance (FBL1n,FBL5n).
I do not want this to happen.
that is the amount posted using special GL indicator should not update the balance.
Pl let me know how this can be possible
Regards,

hi
as per my openion and my experiance in my project we are doing like below
we are mentioned one LC account with vendor reconcilation account after that we define special gl indicator W change description as Letter of Credit payable after that we psot invoice with FB60 after that we mention LCs thru F-40 and clear LCs with F-53
the transactions are at the time of LC
Vendor special G/L Account CR(LCs)
Vendor Account DR(we are selected thru process open itmes)
at the time of LC clearing
Vendor special G/L account DR(we are mentioned special G/L)
Bank outgoing Clearing Account CR.
i think it will be helpful please check it.

Payment by letter of Credit against Purchase order

When we are purchasing from Foreign Vendors , we need to open a Letter
of credit (LC) .
Depending on the terms of Purchase order , Vendor will discount it /get
payment from Bank on submitting LC and other necessary documents.
Vendor's Bank, at appropriate Time will send the same to Customer's Bank
How to mapped this scenario in SAP-MM and FI .
Activities required to be updated against Purchase order :
(1) Payment Terms : 100 % against LC on delivery
(2) History should reflect LC opened - Date and Bank Name which
Vendor has suggested, our company's Bank Name
(3) LC discounted details
(4) LC payment due date to our company Bank - as Procurement needs
to inform to Finance for this.
Any help will be highly appreciated.
Thanks and Best Regards,

When we are purchasing from Foreign Vendors , we need to open a Letter
of credit (LC) .
Depending on the terms of Purchase order , Vendor will discount it /get
payment from Bank on submitting LC and other necessary documents.
Vendor's Bank, at appropriate Time will send the same to Customer's Bank
How to mapped this scenario in SAP-MM and FI .
Activities required to be updated against Purchase order :
(1) Payment Terms : 100 % against LC on delivery
(2) History should reflect LC opened - Date and Bank Name which
Vendor has suggested, our company's Bank Name
(3) LC discounted details
(4) LC payment due date to our company Bank - as Procurement needs
to inform to Finance for this.
Any help will be highly appreciated.
Thanks and Best Regards,

Shipment is to be blocked if Letter of credit date has expired

Shipment must be blocked (provision for Delivery order reversal) if Letter of credit Last Date of Shipment is expired:
Example as follow: - SO 100002703 item 10 - The LC with financial doc 1062 - The last shipping date of Finance.doc 1062 is 30.09.2011 - If user create new Delivery doc at 01.10.2011 ? system should throw error message - If user post Shipment doc at 01.10.2011 ? system should throw error message The validation should be applied for both initial shipment processing or replacement for return.
Edited by: Lakshmipathi on Nov 7, 2011 12:11 PM
Thread Locked - Reason Duplicate post

Hi
This can be achieved by using anyone of the user exits V56USVDP and V56UCHCH.
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

How to track Letter of credit in FI Module.

Dear Gurus,
(Exports scenarios)
I have configured letter of credit for customer's export scenario. At end user level we are creating letter for credit using VX11N. Once the letter of credit is created, we link it to the sales order at header level in billing document tab - financial document field.
I would like to know how can we track this letter of credit in FI module? For example if we receive payment from the bank against letter of credit which is linked to sales order then how will we be able to track that letter of credit while entering the customer payment in FI module.
Also help me understand whether I am posting it to right forum, as I am posting the question for the first time here.
Please advice. Thank you.
Edited by: jayfanse on Jun 9, 2011 5:25 PM
Edited by: jayfanse on Jun 9, 2011 5:26 PM

Dear Jay,
We are also using letter of credit sale in our company but the LC payment is normal from accounting side when ever Accounts receive LC payment from the customer they will post it against customer account (Customer Code) and write the Text this payment against so and so LC and Commercial Invoice Number if you run FBL5N Report you can see this text.
There are some reports to check the LC sales scenario: VXA1, VXA2 & VXA3
Regards,
MH

Process flow of letter of credit and configuration guide

Hi friends,
I want to know accounting entries at every stage in letter of credit for purchase transaction, so also requesting for configuration guide. Points will be assigned
my email id is [email protected]
Thanks
Edited by: keetu on Apr 22, 2008 8:35 AM

Hi,
Check these links.
http://forums.sdn.sap.com/thread.jspa?messageID=3537642#3537642
http://forums.sdn.sap.com/thread.jspa?messageID=5337739#5337739
Regards
Ayyallas

Revolving Letter of Credit - SD.

Hi Friends,
we have a requirement to implement Revolving Letter of Credit, where if a Payment is made for the particular customer it's value should be added to the existing open LC value .
we tested everything with Static LC and every thing is working fine. but now we have to implement revolving LC
Example.
LC duration is 1 JAN to 31 JAN
Initial LC Value = Rs. 1000
order raised = Rs. 800
LC Open value = Rs . 200
so if the customer makes payment for Rs. 300
the open LC value should be Rs. 200(Earlier open LC value) + 300(payment) = Rs. 500
Thanks & Regards
Harsha

Hi,
Kindly consider that when defining the indicators for special G/L transactions, you should define in each case whether the transaction in question is relevant for the credit limit check.
Best regards.

Letter Of Credit Thru GTS

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