| Oracle® Retail Trade Management User Guide Release 14.1 E56591-01 |
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Letters of credit are a widely used form of payment when dealing with imported goods. They provide importers with a secure method to pay for merchandise and vendors with a secure method to receive payment for merchandise. Letters of credit can be created and applied to purchase orders. Activity against the letter of credit can also be tracked.
The following types of letters of credit can be created:
Normal: The letter of credit is applied to one purchase order.
Master: The letter of credit is applied to multiple purchase orders.
Revolving: Multiple purchase orders may be added to the letter of credit until the letter of credit is closed.
Open: A letter of credit is created with no purchase orders. The purchase orders can be added at a later date.
You can choose from two letter of credit formats. The long form includes details at the purchase order and item level. The short form includes details at the purchase order level.
Completed applications and amendments can be transmitted to bank partners. Confirmations, drawdowns, and charges can also be received from bank partners.
Assign a Purchase Order to a Letter of Credit by Letter of Credit
Assign a Purchase Order to a Letter of Credit by Purchase Order
The following sections describe the features associated with the Letters of Credit.
The Letter of Credit Order Apply window allows you to select one or more approved purchase orders and attach them to letters of credit. You can attach a purchase order to an existing letter of credit or you can create a letter of credit. If the purchase orders share the same applicant, issuing bank, beneficiary, purchase type, and title pass location, you can apply more than one to the same letter of credit.
To display information specific to errors or letters of credit, or to create a customized view, select the appropriate option from the View menu.
To display monetary amounts in the primary currency of the company or the local currency of the issuing bank, select the appropriate option from the Options > Currency menu.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
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Note: An open letter of credit does not require the existence of a purchase order. It can be opened to a beneficiary for a monetary amount. You can amend the open letter of credit when it is applied to a purchase order. |
In the Action field, select New.
Click OK. The Letter of Credit Application Header window opens. The LC Ref ID is filled in automatically.
In the LC Type field, select Open.
In the Form Type field, select the type of form.
In the Currency field, enter the code for the currency of the letter of credit, or click the LOV button and select the currency.
In the Country of Sourcing field, enter the code for the country of sourcing, or click the LOV button and select the sourcing country.
In the Partners area, select the applicant and beneficiary.
In the Banks area, select the banks that are involved with the letter of credit transaction.
In the Conditions area, select the conditions that apply to the letter of credit.
In the Dates area, enter the various dates if known.
In the Amount Type field, select the type of amount.
Enter any additional information as necessary.
To enter the terms of the letter of credit:
From the Options menu, select Terms. The Letter of Credit Terms window opens.
In the Title Pass Location field, enter the abbreviation for the type of location, or click the LOV button and select the type. Enter the description of the location in the next field.
In the Transport To and Lading Port fields, enter the abbreviations, or click the LOV button and select the type.
In the Purchase Type field, enter the code for the terms of sale, or click the LOV button and select the terms.
Enter any additional information as necessary.
Click OK to save your changes and close the window.
Click OK to save your changes and close the window.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in Edit mode. Restrict the search to letters of credit in Worksheet status. The Letter of Credit Application Header window opens.
Edit the enabled fields as necessary.
To change the status of the letter of credit, select the appropriate status from the Options menu.
Click OK to save your changes and close the window.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
In the Action field, select either View or Edit.
Enter additional criteria as desired to make the search more restrictive.
Click Search. The letters of credit that match the search criteria appear.
Select a task:
To perform another search, click Refresh.
To display the letter of credit information, select a record and click OK. The Letter of Credit Application Header window opens.
Click Close to close the window.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in View mode. The Letter of Credit Application Header window opens.
To view the terms, activities, amendments, and required documents that are associated with the letter of credit:
From the Options menu, select the desired option. The details appear in the appropriate window.
Click OK to exit the window.
To view the purchase orders that are associated with the letter of credit:
Click Details. The details appear in the Letter of Credit Application Details window.
Click OK to close the window.
To view the monetary amounts in the currency of the letter of credit or the primary currency of the company, select the appropriate option from the Options > Currency menu.
Click OK to close the window.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in Edit mode. Restrict the search to letters of credit in Approved, Confirmed, or Closed status. The Letter of Credit Application Header window opens.
Click Print.
In the Destination field, select where you want the finished report to be sent. Select Preview to view the report online.
From the File menu, select Run Report. The report is generated and sent to the destination that you selected.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in Edit mode. Restrict the search to letters of credit in Confirmed status. The Letter of Credit Application Header window is displayed.
From the Options menu, select Amendments. The Letter of Credit Amendments window opens.
Click Add Amend. The Letter of Credit Amendments Fixed Format Application window opens.
In the New Value fields, enter the changes as necessary.
To remove a required document, enter the ID of the document in the Remove Required Doc field, or click the LOV button and select the document.
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Note: Unlike the other changes, the required document information is entered in the Original Value column instead of the New Value column. |
In the New Comments field, enter information regarding the reason for the amendment.
Click OK to save your changes and close the window.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in Edit mode. Restrict the search to letters of credit in Confirmed status. The Letter of Credit Application Header window is displayed.
From the Options menu, select Activity. The Letter of Credit Activity window opens.
Click Add.
In the Order Number field, enter the number of the purchase order, or click the LOV button and select the purchase order as necessary.
In the Invoice Number field, enter an invoice number as necessary.
In the Transaction Number field, enter a transaction number as necessary.
In the Transaction Code field, select either Bank Charge or Drawdown.
In the Transaction Amount field, enter the monetary amount of the activity.
In the Currency field, enter the code for the currency in which the activity is denominated. The exchange rate is filled in automatically.
In the Activity Date field, enter the date of the activity, or click the calendar button and select the date.
In the Comments field, enter any comments about the activity, or click the comments button and enter the comments as necessary.
To adjust the letter of credit amounts, click Recalculate.
Click OK to save your changes and close the window.
Navigate: From the main menu, select Finance > Payments > Letter of Credit Selection. The Letter of Credit Order Apply window opens.
In the Applicant field, enter the ID of the applicant, or click the LOV button and select the applicant.
In the Issuing Bank field, enter the ID of the bank, or click the LOV button and select the bank.
Click Query Orders. All approved purchase orders that match the criteria are displayed.
To assign a purchase order to an existing letter of credit:
Select the purchase order.
In the LC Ref ID field, enter the reference number of the letter of credit, or click the LOV button and select the letter of credit.
To assign a purchase order to a new letter of credit:
From the View menu, select LC Information. Fields specific to letters of credit appear in the table.
Select the purchase order and click Create New LC. The reference number of the letter of credit is filled in automatically.
In the Form Type field, select the type of form.
In the Letter of Credit Type field, select the type of letter of credit.
Click Apply Orders. The purchase orders are attached to the letters of credit.
Click Close to save your changes and close the window.
Navigate: From the main menu, select Ordering > Orders. The Order Selection window opens.
Search for and retrieve a purchase order in Edit mode. Restrict the search to import orders in Worksheet status. The PO Header Maintenance window opens.
From the Options menu, select Letter of Credit. The Order Letter of Credit window opens.
Edit the applicant and beneficiary as necessary.
In the Letter of Credit Reference ID field, enter the reference number of the letter of credit, or click the LOV button and select the letter of credit.
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Note: A purchase order is not considered to be attached to a letter of credit until the letter of credit is approved. |
In the Merchandise Description field, enter a description of the goods being purchased.
Enter or edit the remaining fields as necessary.
Click OK to save your changes and close the window.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in View mode. The Letter of Credit Application Header window opens.
Click Details. The Letter of Credit Application Details window opens.
To view the monetary amounts in the currency of the letter of credit or the primary currency of the company, select the appropriate option from the Options > Currency menu.
To view the details of a purchase order:
Select a purchase order and click PO Detail. The PO Header Maintenance window opens.
Click OK to close the window.
Click OK to close the window.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in Edit mode. The Letter of Credit Application Header window opens.
Click Details. The Letter of Credit Application Details window opens.
Select a purchase order and click Delete.
When prompted to delete the record, click Yes.
Click OK to save your changes and close the window.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in the Edit mode. Restrict the search to letters of credit in either Worksheet status or Confirmed status. The Letter of Credit Application Header window opens.
If the status is Confirmed, select Amendments from the Options menu. The Letter of Credit Amendments window opens.
From the Options menu, select Required Documents. The Required Documents window opens.
Select the document you want to delete.
Click Delete.
When prompted to delete the document record, click Yes.
Click OK to save your changes and close the window.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in Edit mode. Restrict the search to letters of credit in Confirmed status. The Letter of Credit Application Header window opens.
From the Options menu, select Activity. The Letter of Credit Activity window opens.
Select an activity and click Delete.
When prompted to delete the record, click Yes.
Click OK to save your changes and close the window.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in Edit mode. Restrict the search to letters of credit in Confirmed status. The Letter of Credit Application Header window opens.
From the Options menu, select Amendments. The Letter of Credit Amendments window opens.
Select an amendment and click Delete.
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Note: You can delete an amendment in New and Hold status. You can also delete an amendment in Accept status if it has no amendment number. |
When prompted to delete the record, click Yes.
Click OK to save your changes and close the window.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in Edit mode. Restrict the search to letters of credit in Worksheet status. The Letter of Credit Application Header window is displayed.
From the Options menu, select Terms. The Letter of Credit Terms window opens.
Enter and select the terms as necessary.
Click OK to save your changes and close the window.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in View mode. The Letter of Credit Application Header window opens.
From the Options menu, select Terms. The Letter of Credit Terms window opens.
Click OK to close the window.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in View mode. Restrict the search to letters of credit in Confirmed or Closed status. The Letter of Credit Application Header window opens.
From the Options menu, select Activity. The Letter of Credit Activity window opens.
To view monetary amounts in the currency of the letter of credit, the primary currency of the company, or the currency of the activity, select the appropriate option from the Options > Currency menu.
Click OK to close the window.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in Edit mode. Restrict the search to letters of credit in Confirmed status. The Letter of Credit Application Header window is displayed.
From the Options menu, select Amendments. The Letter of Credit Amendments window opens.
Click Add Amend. The Letter of Credit Amendments - Fixed Format Application window opens.
Add a fixed-format amendment to a letter of credit.
Click OK to save any changes and close the window.
Select the amendment that you want to generate.
In the Status field, select the Accept status.
Click Generate. An amendment number is filled in automatically in the Amend No field for each newly-accepted amendment.
Click OK to save your changes and close the window.
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Note: More than one record can be grouped together on one generated amendment. To do this, set the status of all desired records to ’Accept'. When the Generate button is clicked all records in ’Accept' status will have the same amendment number in the Amend No. field. |
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in View mode. Restrict the search to letters of credit in Confirmed or Closed status. The Letter of Credit Application Header window opens.
From the Options menu, select Amendments. The Letter of Credit Amendments window opens.
To view the net effect of an amendment:
Select an amendment and click Net Effect. The Letter of Credit Amendments Net Effect window opens.
Click OK to close the window.
Click OK to close the window.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in View mode. Restrict the search to letters of credit in confirmed or closed status. The Letter of Credit Application Header window opens.
From the Options menu, select Amendments. The Letter of Credit Amendments window opens.
Select an amendment and click Net Effect. The Letter of Credit Amendments Net Effect window opens.
Click OK to close the window.
The Letter of Credit Activity window allows you to edit and view activities against a letter of credit. You can add the bank charges and drawdowns. A letter of credit activity is added automatically when the issuing bank confirms the letter of credit. An amendment activity is added automatically when a monetary amendment is approved for the letter of credit.
You can edit or view activities for confirmed letters of credit. You can view activities for closed letters of credit.
To display the monetary amounts of an activity in the primary currency of the company, the currency of the letter of credit, or the currency of the activity, select the appropriate option from the Options > Currency menu. You can add or delete an activity only when the currency option is Activity.
The Letter of Credit Amendments - Fixed Format Application window allows you change the current values for various parts of a confirmed letter of credit application. These are for amendments that are initiated by the letter of credit group.
The Letter of Credit Amendments window allows you to modify a confirmed letter of credit by adding amendments to the letter of credit.
Amendments are created automatically when certain values are changed on a purchase order. Amendments to the purchase order can be written once the letter of credit for that purchase order is in Submit status.
If you are using Trade Management to import costs, it is assumed that all locations must have the same cost value for an item. However, if the cost of items that are being imported DO vary by location, Trade Management will convert the cost values to an identical weighted average cost. If a cost is changed on an order at only one location, an amendment is written with the average cost for all locations.
You can also create amendments to the letter of credit itself. For all new amendments, you can choose which amendments to accept for the letter of credit. After an amendment is changed to Accepted status, it can be transmitted to the bank.
The following changes to a purchase order automatically generate an amendment to the letter of credit:
Add another order to a confirmed letter of credit
Add an item to a purchase order
Delete an item from a purchase order
Earliest and latest ship dates
Purchase order cancelled
Transshipment or partial shipment options
Unit cost and order quantity
Required documents (You cannot change the content of the document, only whether it is included.)
Changes to the face of the letter of credit can be made on the Letter of Credit Amendment Fixed Format window. To access the window, click Add Amend.
To display monetary amounts in the primary currency of the company or the currency of the letter of credit, select the appropriate option from the Options > Currency menu.
The Letter of Credit Amendments - Net Effect window allows you to view the net effect that a selected amendment, or all amendments that share the same amendment number, has on the letter of credit.
The Letter of Credit Application Details window allows you to view which purchase orders (short form) or PO/items (long form) are attached to a letter of credit.
To display monetary amounts in the primary currency of the company or the currency of the letter of credit, select the appropriate option from the Options > Currency menu.
The Letter of Credit Application Header window allows you to create, edit, and view letters of credit.
The Letter of Credit Terms window allows you to edit and view the terms of a letter of credit.
The Letter of Credit Find window allows you to enter search criteria in order to search for letters of credit and view the results.
The default view for the Letter of Credit Find window opens when you open the window for the first time. You can also create a custom view.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in Edit mode. Restrict the search to letters of credit in Confirmed or Closed status. The Letter of Credit Application Header window opens.
From the Options menu, select Amendments. The Letter of Credit Amendments window opens.
Click Print. The Runtime Parameter Form opens.
In the Destination field, select where you want the finished report to be sent. Select Preview to view the report online.
From the File menu, select Run Report. The report is generated and sent to the destination that you selected.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
In the Action field, select Download Application.
Enter additional criteria as desired to make the search more restrictive.
Click Search. The approved letters of credit that match the search criteria appear.
Click Send.
When prompted to transmit the letter of credit applications, click Yes. The applications will be converted to the SWIFT format and transmitted by a regularly scheduled batch program.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
In the Action field, select Download Amendment.
Enter additional criteria as desired to make the search more restrictive.
Click Search. The confirmed letters of credit that match the search criteria appear.
Click Send.
When prompted to transmit the letter of credit amendments, click Yes. The amendments will be converted to the SWIFT format and transmitted by a regularly scheduled batch program.
When a letter of credit is added to the system, it must go through a series of checks before it is accessible in the system. Depending on your user role, you may not be able to move the letter of credit to the next status. A letter of credit may be in any of the following statuses.
| Status | Definition |
|---|---|
| Worksheet | The letter of credit has been started, but not completed. |
| Submitted | The letter of credit has been completed and is pending review. |
| Approved | The letter of credit has been reviewed and has been approved. |
| Extracted | The details of the letter of credit were sent to the external entity affected by the letter of credit. |
| Confirmed | The letter of credit has been confirmed by the bank and a reference number has been assigned to the letter of credit. |
| Closed | The letter of credit is complete. |
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in Edit mode. Restrict the search to letters of credit in Worksheet status. The Letter of Credit Application Header window opens.
From the Options menu, select Submit.
When prompted to submit the letter of credit, click Yes.
Click OK to save your changes and close the window.
Navigate: From the main menu, select Finance > Payments > Letter of Credit. The Letter of Credit Find window opens.
Search for and retrieve a letter of credit in Edit mode. Restrict the search to letters of credit in Submitted status. The Letter of Credit Application Header window opens.
From the Options menu, select Approve.
When prompted to approve the letter of credit, click Yes.
Click OK to save your changes and close the window.
