on 08-11-2010 6:23 PM
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
Pablo
Letter of Credit is a standard process for Import/Export transactions. You are in the right track that you need to work with Financial documentary payments which is basically a form of payment guarantee.
You need to do the following config and maintain some master data in customer master.
Sales and Distribution/ Basic Functions/ Credit Management/Risk Management/ Receivables risk management / Define Forms of Payment Guarantee
The Sales order will have the LOC # and the receivables are covered by it. Once your customer receives the goods, you submit the paperwork to your bank and they will make the payment to you.
But I don't see a need to reverse the invoice, the payment you receive from your bank for the LOC will be applied to the invoice.
Work with a FI consultant and Foreign Trade specialist ( if available) to come to grips with the entire process.
See these links for the process flow and set up:
http://help.sap.com/erp2005_ehp_04/helpdata/EN/a2/28abc7abc311d395750000e83dcfd4/frameset.htm
http://help.sap.com/erp2005_ehp_04/helpdata/EN/93/744947546011d1a7020000e829fd11/frameset.htm
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I am not clear in your requirement. Letter of Credit would be issued by the buyer on seller with certain terms and conditions to be adhered to, by the seller this being the case, I dont know why you want to replace the L/C ??
If there are multiple L/Cs, then it is better to crete a separate sale order and assign the L/C reference against each sale order.
thanks
G. Lakshmipathi
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
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