Documentary Payments (SD-FT-LOC) 

Purpose

Foreign Trade's Documentary Payments component enables you to create a master record of a letter of credit and assign it to a Sales and Distribution (SD) document transaction. This record is called a financial document in R/3. By assigning a financial document to a transaction, you can ensure that the data in the SD document for the transaction complies with the terms of the financial document.

Financial documents significantly reduce the risk involved in foreign trade transactions. For exporters, they help ensure payment on time and in full. For importers, they help ensure that the goods they pay for are exactly what they ordered. They also ensure that they have actually been shipped.

The financial document in SAP's Foreign Trade System is not only used for letters of credit. It can also be used to represent documents against payment (d/p) or documents against acceptance (d/a).

Implementation Considerations

Use this component if you use financial documents in transactions with foreign customers. For example, you may require a financial document if you are unsure of a particular customerís ability to pay. In addition, some governments require financial documents for trade with other countries.

Integration

The Documentary Payments component is completely integrated in the Sales and Distribution (SD) Credit Management component to ensure that financial documents are harmonized with other forms of payment security such as payment cards. As an example of this integration, if the value of a sales order exceeds the value of its corresponding financial document, Credit Management will block the sales order.

This component performs consistency checks between financial document master records and both sales orders and deliveries. It also updates financial document master records with data from sales orders, deliveries, and invoices.

Features

 

Return to Foreign Trade / Customs main topic.