Vendor Letters of Credit

Use this form to document letters of credit (LCRs) from your banks to vendors who require them.

In purchasing, a letter of credit is a document from a bank stating that the bank will insure your payment to the vendor. You may have to deposit money beforehand with the bank, or the bank may be extending credit to you, but in either case the bank guarantees payment to the vendor. Letters of credit are commonly used in Asia and in some European countries.

If a vendor requires an LCR from you, the LCR Required field on the Vendors or Multi-Site Vendors form should be selected. Then, any time you create a purchase order for that vendor, you must enter a valid LCR number (in the Amounts tab of the Purchase Orders form). If the LCR number is not valid, or if the accumulated value of all purchase orders to that vendor will be more than the limit of the LCR, a warning is issued. However, the system will allow purchasing activity to continue.

You can list purchase orders for this LCR through the Actions menu.