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Department: Finance
Units: Payables Letter of Credit
Author:
Ejaz Hussain
Creation Date:
June 4, 2009
Last Updated:
June 6, 2009
Version
1.0
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Contents
CONTENTS.....................................................................................................................................................................................................2
INTRODUCTION...............................................................................................................................................................................................3
PURPOSE.......................................................................................................................................................................................................3
TYPE OF LETTER OF CREDIT.............................................................................................................................................................................4
SIGHT LETTER OF CREDIT................................................................................................................................................................................5
USANCE LETTER OF CREDIT.............................................................................................................................................................................7
LC TRACKING DFF ENABLED..........................................................................................................................................................................8
LC DETAIL ..................................................................................................................................................................................................9
GLOSSARY OF COMMONLY USED TERMS............................................................................................................................................................13
OPEN AND CLOSED ISSUES FOR THIS DELIVERABLE............................................................................................................................................14
Open Issues..........................................................................................................................................................................................14
Closed Issues........................................................................................................................................................................................14
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Introduction
This paper will provide a practical guide to letters of credit and as there is no functionality as of now
to use Letter of Credit as a means of payment which is increasingly being used, as a workaround in
Oracle Payables to handle payments through Letters of Credit.
Purpose
The requirement is in Abdullah AM AL-Khodari Sons; after they Open LC(Letter of Credit) with bank
against a Supplier, they want to track it in the system.
This document will serve as a basic tool in understanding letters of credit solution within
Payable module.
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2.
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Steps:
1.1 Raise a Purchase Order
Raise a Purchase Order in Oracle Purchasing stating the description of goods,
quantity, unit price, and terms of delivery. Purchase order would be issued
after beneficiary examined that all the terms and conditions of letter of credit
are/can be complied with.
Debit
XXXX
1.3
Credit
XXXX
Debit
Credit
xxxx
xxxx
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Account
Dr. Supplier Liability
Cr. LC Billpayables A/c
Debit
XXXX
Credit
XXXX
There is one Program that has been schedule to Run every end of day;
it is Update Matured Bills Payable Status
It will Dr. Billpayables a/c and Cr. Bank a/c which you had selected while
making above payment.
Account
Dr. LC Billpayables A/c
Cr. Bank A/c
1.4
Debit
XXXX
XXXX
Receipt of Goods
On receipt of goods record a receipt transaction in Inventory
Account
Dr. Material Account
Debit
XXXX
1.5
Credit
Credit
XXXX
Debit
XXXX
Credit
XXXX
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Debit
XXXX
Credit
XXXX
2.2
Receipt of Goods.
On receipt of goods record a receipt transaction in Inventory
Account
Dr. Material Account
Cr. AP Accrual Account
2.3
Debit
XXXX
Credit
XXXX
Debit
XXXX
Credit
XXXX
Debit
XXXX
Credit
XXXX
There is one Program that has been schedule to Run every end of day;
it is Update Matured Bills Payable Status
It will Dr. Billpayables a/c and Cr. Bank a/c which you had selected while
making above payment.
Account
Dr. LC Billpayables A/c
Cr. Bank A/c
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Debit
XXXX
Credit
XXXX
Supplier
Currency
Issuer Bank
Foreign Currency Amount
Functional Currency Amount
Date of Issue
Date of Expiry
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LC Detail
When LC opened with bank record the LC details:
Click Here
Click
(a)he
re
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Invoice Workbench
While entering Prepayment/Standard Invoice go to Invoice header level DFF
and after entering Project and Department code, click on Invoice Reference
and select LC Detail from Drop down LIST:
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ID
Issue
Resolution
LC_RPT
Responsibility
Target
Date
Impact
Date
Responsibility
Target
Date
Impact
Date
Closed Issues
ID
Issue
Resolution
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