Revolving Bank Gaurantee/ Letter of Credit

Dear All,
Can anyone explain how can we handle the scenario of Revolving Letter of Credit/ Bank Gaurantee's?
Thanks in advance.

Dear Friend,
I have created the LC document which can be assigned to Header/ Item Level of the sales document. System keep tracks the document value with the LC document. This LC document is of Static nature only.
My question was regarding revolving LC.
In revolving LC document, whenever customer pays the amount within the validity of LC document, system updates the available/open amount of LC document so that it can be utilized again.

Similar Messages

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.

Bank Gurantees & Letter of Credit

Pls explain how bank gurantees and Letter of credit customizin and procee of above field explain me with exampls any documents appreciated
[email protected]
Edited by: Madhava Venkat on Jul 2, 2008 8:56 AM

Hi
Bank gtee, Performance gtee and Letter of Credit - all three are statistical postings just like contingent assets or liabilities. It should be excluded from the Financial statement version.
These needs to be entered in the below transaction codes:
F-55 - Vendor statistical posting entry
F-56 - Vendor statistical posting entry reversal
F-38 - Customer statistical posting entry
F-19 - Customer statistical posting entry reversal.
1) For entering this, you need to create a special G/L indicator like bank gtee recd or given, letter of credit recd or given and perf gtee recd or given for customer and vendor in FBKP transaction code.
For creating the special G/L indicator, you need to create recon accounts for these entries in FS00.
2) You need to create an offsetting account and provide open item management ticked and post automatically ticked in FS00 tcode.
Enter the entry in the above transaction codes.
In case of reversal entries, in the G/L account column, enter the alternative recon account which you provided in the special G/L indicator, enter customer/vendor number and document number and click edit line items. Set the line item to active, but selecting "+" from the F4 option and click post. This will reverse the document you have made.
Hope it will help you lot
Regards
Aman
Assign points if useful

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

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.

Tracking of due dates in case of letter of credit and bank guarantee

Hi
In case of letter of credit and bank guarantee can a track be kept in sap for bill negotiated and due (means the vendor has claimed payment but payment from us to our bank is not due) ,
negotiated and due(means our payment is due)
and bills negotiated and overdue (means payment from our side to our bank is overdue)
how is it possible plz explain in detail as i have never worked ob LC and BG.
Thanks in advance.

Hi
Thanks for the answer I will try to explain my requirement .
In case of import and exports Letter of credit and bank guarantee are opened with the bank. There can be amendments also after its creation in terms , amount or validity period. Then it is negotiated and retired.
An example : A letter of credit is opened on 1st Jan. The goods are shipped on 7th Jan .Credit term given by our bank (in case of import) is 1 month which is counted from the shipment date and it expires on 7th feb. The vendor negotiates the bill on 15th jan.
The requirement is to get a report of u2018negotiated and dueu2019 and u2018negotiated and overdueu2019category.
Like from 15th Jan to 7th Feb the bill negotiated by the vendor comes under u2018negotiated and dueu2019 category and after that it comes under u2018negotiated and overdueu2019category.
List of letter of credits established , negotiated , retired and balance if any.
Letter of credit wise u2013 Bank charges paid. i.e at the time of opening , amendment , negotiation and retirement.
Same in case of bank guarantee also.
Plz explain me how can this be tracked and how to configure this.

How to enter letter of credit and bank draft

hi,
1) if i would like to enter letter of credit and bank draft in system, what tcode to do so?
2) it is statistical or noted?
3) LC can be from customer and vendor?
4) bank draft only for customer, right?
thanks

Hi,
First you have create special G/L Indicator for customers/vendors and assign the same in OBXT and create LOT transaction in t.code F-55.
Try once and given feedback.
Regards
Sarma BH

Bank guarantee and Letter of Credit

How does one include Bank guarantee in SAP SD credit check.
What is the difference between bank guarantee and letter or credit?

Dear Ravi
To my knowledge, Bank Guarantee is used only in Imports whereas, L/C is used in both (exports and imports) scenarios. In both the cases, bank stand guarantee for payment to seller.
thanks
G. Lakshmipathi

Bank gurarantee and letter of credit

Hi experts,
how we can update the the bank gurarantee and letter of credit in SAP systems,
Is i need any additional configuration ?
regards,
Sanju MS

Dear Sanju MS,
please kindly run the transaction OBXY. You should already have the following entries:
D G Guaran. Guarantee
D L Letter Letter of Credit
Then You can use F-38, F-49 to post.
I hope this helps.
Mauri

Letter of credit in Sales Order processing

The Problem is related to LC(Letter Of credit) attached to Sales order.
In some cases, when we raise a sales order and attach LC even if all the fields are matching in LC and sales order the value is not reflected in LC.
One more problem is When the order is attached with LC it should not go into credit check but it goes into credit check and blocks the order.
In Case, we are using revolving LC even if the payment is recieved from the customer the value is not getting update in the LC.
The above kind of problems are also persistant in all sorts of documentary payments i.e Bank gurantees and Lc etc
We are using documentary payments for foreign trade for special business trasactions where customer credit management should not be utilized.
Any suggetions on the issue or insight in foreign trade and documentary payments will be highly appreciating.

Hi sreedhar,
U just have to do a simple customization as follows,
Go to IMGSales and distributionbasic datacredit and risk mangement-forms of guarentee--assign form of guarentee with order type....
in this case, asssign your letter of credit guarentte (assuming that u have alrdy created the letter of credit as a form of guarentee) with sales oreder type OR..the u wont be having any problem
Thanks,
Krish

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,

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

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 value to be updated

Hi Guys
I have created a Financial Document for my Letter of Credit (LC) value of Rs.100
I have assigned the same to the sales order for the value of Rs.80
I have one more Sales order against this LC for Rs.40
Now my customer have went to the banker and increased this from Rs.100 to Rs.120
If i create a sales order it will go for block, and the same can be relesed
But i have a issue with the above process, if i do the same it will not update my consumption in my LC financial document and in our case it will be still have Rs.20 as open value in the financial documents
To solve this issue, i am trying to have a supplement financial document for LC so that it will update my LC financial document as Rs.120 from Rs.100, and hence through this LC Open value will be Zero
Else, is it possible to update more than one LC financial document to a single sales order, hence in our example i will create a new LC financial document for Rs.20 and i can assign both the old LC financial document number for Rs.20 and for the new LC financial document number for Rs.20
Thanks guys
Bala

Hi
Yeah you can do that.
In your sales order enter the two line items ex
Line item 1 Material 1 20
Line item 2 Material 1 20
Now you can enter the 2 LC for these line items
regards
Prashanth

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

Revolving Bank Gaurantee/ Letter of Credit

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