A letter of credit (LC) is a document that guarantees to the seller, issued by a bank on behalf of the buyer. Letter of Credits ensures timely and full payment to the seller on fulfilment of the goods or services. If the buyer failed to make such payments, the bank covers the full or the remaining amount on behalf of the buyer. The letter of credit also ensures that the seller meets all the agreed-upon standards, delivery schedule and quality of goods.
Letter of Credit essential payment instrument in international trade finances or export businesses.
Challenge:
- Letter of Credits issued in hard copy form as a paper-based instrument.
- Letter of credits to be reviewed periodically to track expiry date and Payment terms
- Keep track of the tolerance and terms mentioned in LC are difficult due to the manual process.
Solution:
- For effective tracking of the trade finances, businesses can use their custom Letter of Credit (LC) Tracking Software built on Officexlr Platform.
- Where they can create and import their letter of credits into a cloud application, with essential data like LC Type, Issuer Bank, Buyer Name, Seller Name, LC Margins, Bank Charges, Shipping Terms, Payment Terms, Insurance Terms, Expiry, Tolerance etc.
- With Report Builder one can generate useful reports and track Project-wise, Status-wise LCs.
Benefit:
- Error-free, Detailed data will help businesses to evaluate the performance of third-parties such as forwarders, carriers, banks, etc.
- Notification on Transaction to monitor events such as shipment and expiration dates keeps updated and eliminate manual tracking.
- Ensure data is tracked accurately and minimizing errors that occur due to manual tracking.
- Keep eye on deadlines and payment eligibility with payment terms, and manage settlements.
