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
Similar Messages
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Letter of Credit Process in SAP
Hi Guru's
Can any one send me or explain me the letter of credit process in SAP or sales cycle?
please send step by step configuration or documentation on the above process.
my mail id is [email protected]
Suitable points will be rewarded.
thanking you in advance for your kind help.
Thanks n Regards
ToshniwalHi,
Please find the Letter of credit details
The configuration is as follows - OVFD, Define and assign payment guarantee, OBYN,OBYH, and OBYK. It is properly working.
I made all the required transaction VX11N, VXA2, F-36, F-34, F-20
Letter of Credit: A letter issued by a bank to obtain payment for goods. When a letter of credit is confirmed, the advising bank guarantees payment only if all stipulations in the letter of credit are conformed to exactly.
1.The importer first request a quote for merchandise. This may or may not include transportation and insurance costs.
2.The importer prepares a purchase order based on the offer received from the exporter.
3.The exporter creates a proforma invoice and sends it to importer.
4.The importer opens a letter of credit with the opening bank in the country of import.
5.The opening bank sends the letter of credit to the advising bank in the exporters country.
6.The advising bank advises the exporter that a letter of credit has been opened in his favor.
7.The exporter ships the merchandise in accordance with the terms stipulated in the LOC.
8.The exporter gives the documents proving that the shipment was made in conformance with the LOC to the advising bank.
9.The advising bank pays the exporter based on the documents received.
10.The advising bank transfers the documents to the opening bank and receives payment.
11.The opening bank gives the document to the importer.
12.The importer calculates the duty rates, file the declaration with customs and pays the customs duties within the time frame required by law.
Hope this will be useful
Reward points if helpful to you.
Bye
Anil -
Letter of credit Process in Credit management for Customer/Vendor.
Dear Team
I am in need of some information on Letter of credit Process in Credit management for Customer/Vendor
If you have any information with examples on the same Pelase provide me the same.
Thanks
Mehda.dear friend,
please look here:
http://help.sap.com/saphelp_47x200/helpdata/EN/2a/30b746b1d511d194f300a0c9306794/frameset.htm
good luck! -
LC (Letter of Credit) Processing
Dear Sirs,
I have created a LC using VX11n and assigned the LC number to a Sales order. But, I am not able to see the reduction in LC Value / utilization in the LC report - VXA2.
Can anyone suggests how LC is consumed and where can I see the report of the pending value of LC?
Regards,
Rajni.Dear GSL,
LC is assigned in both header as well as Item Level, still there is no reduction of value in VXA2.
Can you please suggest, what could be the other solutions? Do we need to Activate Credit Control Area to take this into effect?
Regards, -
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 - 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
sarvanHi 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 in Sales return process/
Hi All,
This issue is related to Letter of Credit, I created a sales order and maintained Financial document in Billing Tab (Letter of Credit) & saved the sales order and the balance of LOC is updated, i created Delivery & Invoice also . Later stage the customer returned the materials and we Created the return sales order but the letter of Credit open value is not increasing or not Crediting.
Please let us know in case of return process weather the LOC or Financial document will credit or not?
RegardsHi
Letter of Credit is used in credit management as one of the tool for Risk management. In case of return process LOC or financial document wont get credited as LOC is for intimation to the customer if the risk level has come to high.Also run the t.code VXDG.
Please check the below link which may help you
http://help.sap.com/printdocu/core/Print46c/en/data/pdf/SDFTLOC/SDFTLOC.pdf
Regards
Srinath -
Process Of Letter of Credit for Imports
Dear all,
Any one tell me process Of Letter of Credit for Imports ?
which transaction code can I use to post accounting entries ? which step to configure ?
step by step
Thank in advance
Minhtb
Edited by: Tran Binh Minh on May 8, 2008 5:44 AMHi Phani
Thank for your help
Please tell me step by step from creating a letter of credit to paying
I have a business below:
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
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.
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.
Please tell me how to configure and post accounting entries
Step by step
Thank you very much
Minh -
Letter of Credit for imports, openning amendment and closing process
Hi All,
Can any body explain the process for the letter of credit opening amendment and closing process for imports.
ur earliest response would be highly appreciated.
Thanks & Regards,
Althaf.Hi Phani
Thank for your help
Please tell me step by step from creating a letter of credit to paying
I have a business below:
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
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.
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.
Please tell me how to configure and post accounting entries
Step by step
Thank you very much
Minh -
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 AMHi,
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 -
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 -
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,
PabloHello 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 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,
PabloHello 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 -
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 postHi
This can be achieved by using anyone of the user exits V56USVDP and V56UCHCH.
Regards
Srinath
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