Letters of credit
Keep every letter of credit you open for an import or receive for an export. Keep the bank, amount, tolerance, expiry and last shipment dates, the documents checklist and each amendment. You get a to-do 15 days before the dates, and a revised purchase order flags the LC for amendment.
PLANSScale only
The problem it solves
- LC expiry and last shipment dates sit in a diary, and a shipment misses the date by two days.
- A purchase order is changed with the supplier, but nobody asks the bank to amend the LC, and the documents are refused.
- The documents the LC asks for are gathered at the last minute, and one certificate is missing.
How it works
- Your purchase officer opens Trade > Purchase > Imports > Letters of Credit > New and picks Opened by Us (Import) or Received by Us (Export). They add the supplier or buyer, the bank, amount, currency, tolerance, expiry and last shipment dates, and sight or usance.
- A new LC starts with the usual documents: commercial invoice, packing list, and bill of lading or airway bill. Also certificate of origin, insurance certificate and inspection certificate. Add, remove or set the copies, and tick each one Ready.
- Enter the bank's LC number and press Open. On the Shipments tab, link the import shipments it covers.
- Fifteen days before the last shipment date and the expiry, whoever made the LC gets a to-do. An open LC past its expiry becomes Expired by itself.
- If a purchase order under it is revised, the LC is marked Amendment Needed with the reason in its history. When the bank has amended it, record the amendment and its charges and press Bank Has Amended.
- Press Mark Used when the credit is drawn, and Close when it is settled.
Everything it does
The LC
- Numbered LC/year/, with the bank's LC Number beside it
- Import (opened by us) or export (received by us); the supplier or buyer; the issuing, advising or negotiating bank
- Amount, currency and Tolerance (%), such as 5
- Issued On, Expires On, Last Shipment Date
- Payment: At Sight or Usance (Deferred) with the usance days
- States: Draft, Open, Used, Expired, Closed; every change is kept in its history
Documents and amendments
- Documents checklist with copies and Ready, six usual documents to start with
- Amendments: date, what changed and the bank charges
- Amendment Needed: set by a revised purchase order of a shipment under an open LC, cleared with Bank Has Amended
Dates and lists
- A daily job marks open LCs past their expiry as Expired
- A to-do 15 days before the expiry and before the last shipment date, to the person who made the LC
- Filters: Open, Amendment Needed, Expiring in 30 Days, Import, Export; group by status, bank or import / export
- The list is sorted by expiry date, soonest first
What it does not do
- No bank entries: margin money, bank charges and the payment under the LC are booked in your accounts as usual
- No link to your bank's trade portal; the LC is typed from the bank's advice
- Export LCs are not linked to export invoices; note the invoice in the LC's notes
Who uses it
Purchase OfficerOpens import LCs, keeps the documents ready and links the shipments.
AccountsKeeps amendments and bank charges. The menu sits under Purchase, so give accounts staff the Purchase Officer role too.
Owner or Trade ManagerWatches what expires in the next 30 days and what needs an amendment.
Where you use it
- Web: Trade > Purchase > Imports > Letters of Credit
- Web: the to-dos of the person who made the LC, in their inbox and activity list
- Not in the SmartMy Trade app
What you control
Settings
- Reminder: 15 days before the expiry and the last shipment date (fixed)
- The documents list each new LC starts with (fixed; change it per LC)
- Payment terms per LC: At Sight to start with
Notifications
- No notification event: the reminders are to-dos, which also show in the person's inbox
Questions
Who is reminded before an LC expires?
The person who made the LC gets a to-do 15 days before the expiry and 15 days before the last shipment date. Share the LC with others by adding them as followers.How do we know the bank must amend the LC?
When a purchase order of a shipment under an open LC is revised, the LC shows Amendment Needed with the order and the reason. It stays until you press Bank Has Amended.Can we keep export LCs too?
Yes. Choose Received by Us (Export) and enter the buyer and the advising or negotiating bank.Does it post the LC margin or charges to the books?
No. The LC is a register with dates, documents and amendments. Book the margin, charges and payment in your accounts as usual.Related features
IMPORT, EXPORT AND GROUPSImport shipments, bill of entry and landed costFollow each import from booking to the godown: its purchase orders, containers, BL, dates and bill of entry. Customs duty, freight, insurance and clearing charges are estimated first, entered as actual later, and spread into the cost of the goods received.IMPORT, EXPORT AND GROUPSExport invoices under LUT or IGST, with incentives and packing listsAn invoice to a buyer abroad is marked as an export by itself, under your LUT or with IGST paid. It carries the port, the shipping bill and later the e-BRC, and keeps RoDTEP and drawback in view until they are received. Deliveries print a packing list with packages and weights.CUSTOMERS, BROKERS AND REPORTSRevisions of quotations, orders and POs, comparedChange a sent quotation, a confirmed sales order or a purchase order and keep every earlier version. The order keeps its number with Rev 1, Rev 2. Any version can be compared with the order as it is now, line by line.ORDERS, PURCHASE AND CREDITPurchase orders, goods receipts and supplier billsOrder from a supplier, count what arrives against the order with the supplier's bill number and any damage, and book the supplier's bill. A purchase order over your limit waits for a manager's approval first.
See your shop on it.
Tell us what you sell, how many shops and godowns you run and how you bill today. We will set up your items and parties with you and print your first bill.