Setting LC (Letter of Credit)

How to set LC functionality in SAP ?

As you are posting in MM forum, I assume you want this from a procurement point of view.
This is not available in SAP. SAP has this foreign trade functionality only developed from a SD point of view, to secure that you do not ship more than the secured value.

Similar Messages

  • Letter Of Credit During Export sales

    Hellos Experts,
                             This is neo, I work for the client were they have export sales so they have the Letter Of Credit during the process. Now the scenario is that.
    I know some thing like I did the configuration setting for this In IMG (Foreign trade and customs >> Documentary payments) every thing is 5n. and the process which i fallow is
    va01
    vx11n
    vl01n-PGI also
    VF01
    VF02-release to accounting.
    when i am doing the sales order in the line item i am entering the LC num:":82" and saved the document. After this when i see the VX12N the 82 number then the lc value is decreased. after the completing of delivery and invoice and release also when im going to check the value of LC 82 is reamins same.
    here my qutions are:
    1) how to do the export sales process with LC
    2)the process which i fallow is correct or wrong
    3) what is the use of
         a) VKM3
         b) VKm5
         c) VXA3
    4) if during this process do i need to release the document using any special transaction codes
    5) The Main can I use Single LC to Multiple sales Orders.
    thanks and regards,
    Neo
    Edited by: neo.anu on Jul 24, 2010 7:32 AM

    Dear indrajit
    run VX11N and maintain the L/C details there and once saved, a reference number will be generated.  Go to sale order, select at Header tab Billing and assign this reference in the field Financial doc no 
    thanks
    G. Lakshmipathi

  • Letter of Credit (Urgent )

    Hi All,
    I needed to know if anyone has worked on letter of credit or have dealt with payment gurantee procedure configuration.
    Define and Assign forms of payment guarantee has 5 different configs. First one, Define payment guarantee schema - This part of this configuration controls the sequence in which system assign the sales document ITEMS to payment guarantee procedure. I want to know where actually we can see these sequences happening. I looked at the sales order (at the item level) but system is only picking payment guarantee procedure and form of payment gurantee. I don't see any sequecial order in which I set the config.
    Any input will be great!
    Regards
    Navneet Kaur Bhatia

    Hi Navneet,
    Letter of credit configuration is same as bill of exchange, with small changes.
    Hope the following link is useful to you:
    http://help.sap.com/printdocu/core/Print46c/en/data/pdf/FIBP/FI-AP-AP-BE.pdf
    also: Process Of Letter of Credit for Imports : http://www.sap-img.com/financial/process-of-letter-of-credit-for-imports.htm
    Pls assign points as way to say thanks
    Message was edited by:
            Ravi Rana

  • 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

  • Letter of Credit Issue in Sale Order

    Hi Gurus,
    Please help me on this issue.
    I have created a financial Document, Letter of credit with Terms of Payment xxxx, ie, due within 90 days.
    But when I am creating a sale order and manually changing the Terms of Payment to yyyy, ie due within 30 days, the system is issuing a warning message and allowing to save the sale order.
    I don’t want to save the document if there is a change in the terms of payment from the LC document.
    Is there any configuration setting where i can stop this.
    Please help me on this issue.
    Thanks,
    Sam

    Hi SAM,
    u can run the tcode vx52 and at "Terms of Payment Tab" you can change the terms of pament to "2" and tick the check box near to "terms of payemnt tab"
    or
    check the "   Define Payment Guarantee Schema Determination" in folowing menu path :---
    Sales and Distribution--Foreign Trade/Customs documentry payment- risk management of financial documentdefine and assign guarantee schema.
    check the above determination procedure in detail..
    rewars points if useful..
    regards
    yogesh

  • Letter of Credit in Payment Due Date Calculation

    Dear All,
    I meet a case as following:
    Sales Order A with 80% Letter of Credit
    (L/C) payment (set in header condition) and 20% downpayment, with Payment Terms: L/C payment due
    date is before a special date.
    Question 1: If downpayment has cleared, whether user can see that a
    record of downpayment paid in a Sales Order under SAP standard design?
    Question 2: whether SAP standard desgin/configuration can set L/C
    payment due date by a payment term? note: L/C is flexible depends on
    different Sales Order?
    Thanks for all your helps!

    Did you find a solution to this?
    Is it possible to separate down-payment from rest of sales order - so Letter of Credit is only for the sales value minus down- payment?
    SO value 1 Mio USD
    Down-payment .2 Mio USD
    LOC value >> .8 Mio USD?
    Cheers
    Hein

  • Control Delivery split based on diff in exchange rate (let. of credit)

    Hi Team,
    We have a scenarios where the user does nto want split in delivery because of differecne in Exchange rate for line items.
    In my case when Letter of credit si assigned to line item.
    I understand this as standard behavior that a delivery splits happens based on difference in exchangerate.
    My question is to control this split, will it be a right to control it by routine in copy controls routine form order to delivery or we consider the user exit.
    So, kindly assit me to solve this or do we have any standard setting by which i can control. this.
    Thanks in advance
    Balaji

    Hi Balaji,
    See Note 415716 - User exits in delivery processing, because it tells us how some modification can affect to split documents.
    I suggests you to manage it with VOFM subroutine. The idea is that diferent values in LIKP-ZUKRL determintes the split of documents. You can populate until 40 characters, and you manage it with structure ZUK. This concatenation in a string is moved to LIKP-ZUKRL. It works like ZUKRI in spliting of invoice. This VOFM is set in copy rules.
    Regards
    Eduardo

  • 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 amount information

    Hi guys,
    My client want the system should block delivery, when ever the amount of letter of credit below the invoice amount.
    Can we map  it in B1?
    what is calculation field? and how could it be done?

    Hi
    Administration -> System Initialization -> General Settings -> BP tab,
    select 'Customer Activity Restrictions'
    Check the boxes, 'Credit Limit' and 'Delivery'
    In  the BP Master,
    Business Partners ->Business Partner Master Data -> Payment Terms tab,
    set the 'Credit Limit'
    Go to 'Authorizations' window and select the user from the left window. From the Right window, select
    'Confirm Credit Line Deviation' option under 'Sales A/R'. Set 'No Authorization' here.
    This makes the user to restrict delivery when the credit limit exceeds.

  • Regarding letter of credit

    HI
    Can any one say me how to hadle Letter fo Credit in SD.
    As my client does not have export scenario i have been said that they are going to have it in domestic sale please provide me the settings and the masters if any has to be updated.
    And in what way it has to be handled.
    Thanks in advance.
    Regards,
    indu

    HI
    Appreciate ur quick response thanks alot..
    As u said i have to main in a transaction the informationof LC  I have to do some setting anywhere so that it will have a link in the sales order.
    Moreover u have been saying that something should be maintained in condition which will get determined could you please be lill alobarate in this.
    Sorry for asking all these as i had not worked in LC till date.
    Thanks in advance.
    INDU

  • 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

  • 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

  • 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

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