Letter of Credit functionality and Credit Management

[former_member193516]

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

[Former Member]

This message was moderated.

[Former Member]

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

[former_member193516]

Anyone with experiences with LOC and Credit Management/ FSCM?

Is it possible to get information from FI document into L/C ?

[former_member193516]

Is it actually possible to attach a copy of the Letter of Credit to the SAP entry? In standard Financial document function in ERP this is not available.

[Former Member]

Yes, you can.