Manage a letter of credit

Coordinate credit terms, presentation evidence and the financial work that follows.

12 stages · 6 approvals

Roles and responsibilities

Trade Finance Coordinator Finance Manager Accountant System 1 Prepare request Draft → PendingApproval 2 Approve request Draft → PendingApproval 3 Record instrument Draft → PendingApproval 4 Review amendment Draft → PendingApproval 5 Preparepresentation CreditDrawings 6 Approvepresentation CreditPresentations 7 Record bankresponse Draft → PendingApproval 8 Resolve discrepancy CreditDiscrepancies 9 Review financialeffect BankObligations 10 Reconcilesettlement Draft → PendingApproval 11 Reconcileremaining scope Draft → PendingApproval 12 Approve closure Draft → PendingApproval
  1. Step 1Prepare request
    LC Requests Awaiting ApprovalPendingApproval
    Credit NumberOrientationCustomerSupplier
    Exporter Beneficiary
  2. Step 2Approve request
    LC Requests Awaiting ApprovalPendingApproval
    Credit NumberOrientationCustomerSupplier
    Exporter Beneficiary
  3. Step 3Record instrument
    LC Requests Awaiting ApprovalPendingApproval
    Credit NumberOrientationCustomerSupplier
    Exporter Beneficiary
  4. Step 4Review amendment
    LC Requests Awaiting ApprovalPendingApproval
    Credit NumberOrientationCustomerSupplier
    Exporter Beneficiary
  5. Step 5Prepare presentation
    Presentations Awaiting ApprovalPendingApproval
    Presentation NumberDrawingTerms SnapshotBank
  6. Step 6Approve presentation
    Presentations Awaiting ApprovalPendingApproval
    Presentation NumberDrawingTerms SnapshotBank
  7. Step 7Record bank response
    LC MaturitiesAccepted
    Drawing NumberCreditCurrencyAccepted Amount
  8. Step 8Resolve discrepancy
    Presentations Awaiting ApprovalPendingApproval
    Presentation NumberDrawingTerms SnapshotBank
  9. Step 9Review financial effect
    Funding ObligationsOpen
    Obligation NumberCreditBalance SideOrigin Kind
    Bank Receivable
  10. Step 11Reconcile remaining scope
    LC Requests Awaiting ApprovalPendingApproval
    Credit NumberOrientationCustomerSupplier
    Exporter Beneficiary
  11. Step 12Approve closure
    LC Requests Awaiting ApprovalPendingApproval
    Credit NumberOrientationCustomerSupplier
    Exporter Beneficiary
Red diamonds require approval.Rows show responsibility for each step.

Process steps

Follow the process from start to finish. Select a step to see who acts and what changes.

Prepare request

Trade Finance Coordinator prepares the applicant or beneficiary context, parties, banks, amount and proposed terms. Link eligible commercial scope and required documents; unresolved terms remain visible.

Responsible
Trade Finance Coordinator
Status
Draft → PendingApproval
Records
DocumentaryCreditsFinancialInstitutionsCreditConditions
Effect
Prepare exact instrument and source requirements
Approval required

Approve request

Independent Finance Manager approves the exact request, excluding preparers and material editors. Review currency, beneficiary, bank details and current authority. Approval does not establish bank issuance.

Responsible
Finance Manager
Status
Draft → PendingApproval
Records
DocumentaryCreditsApprovalDecisions
Effect
Independently authorize the protected request

Record instrument

Trade Finance Coordinator records issuer-issued, confirmer-covered and beneficiary-effective terms with their actual evidence and dates. Request acknowledgment is insufficient.

Responsible
Trade Finance Coordinator
Status
Draft → PendingApproval
Records
DocumentaryCreditsCreditBankEvents
Effect
Preserve actual bank instrument evidence
Approval required

Review amendment

Independent Finance Manager reviews the proposed revision. Trade Finance Coordinator retains required external acceptance. Protect existing drawings and obligations; incompatible term versions cannot be combined.

Responsible
Finance Manager · when terms change
Status
Draft → PendingApproval
Records
CreditAmendmentsDocumentaryCreditsApprovalDecisions
Effect
Review changes and retain external acceptance

Prepare presentation

Trade Finance Coordinator assembles documents against the presentation’s recorded governing terms and eligible invoice or shipment scope. Partial presentations reserve remaining amounts. Corrected attempts retain the same drawing family.

Responsible
Trade Finance Coordinator
Records
CreditDrawingsCreditPresentationsCreditDocumentsCreditAllocations
Effect
Reserve eligible document and drawing scope
Approval required

Approve presentation

Independent Finance Manager authorizes the frozen instruction. Actual transmission and bank presentation retain separate evidence. Local completeness review does not decide the bank's examination outcome.

Responsible
Finance Manager
Records
CreditPresentationsApprovalDecisions
Effect
Authorize the current presentation instruction

Record bank response

Trade Finance Coordinator records actual response, discrepancies, accepted scope and maturity. Uncertain outcomes retain claims. Expiry does not erase an established drawing or bank obligation.

Responsible
Trade Finance Coordinator
Status
Draft → PendingApproval
Records
CreditBankEventsCreditDrawingsCreditDiscrepancies
Effect
Record actual outcome and remaining maturity
Approval required

Resolve discrepancy

Independent Finance Manager reviews the action. Preserve original documents and discrepancies; applicant waiver or local approval cannot impersonate bank acceptance.

Responsible
Finance Manager · for protected correction or waiver
Records
CreditDiscrepanciesCreditPresentationsApprovalDecisions
Effect
Review protected corrective or waiver action
Approval required

Review financial effect

Independent Finance Manager approves each exact evidenced obligation, receivable/payable, collateral, fee or settlement treatment. An undertaking alone is not supplier settlement; bank-held proceeds remain separate from company cash. Unknown classification blocks posting while actual evidence remains visible.

Responsible
Finance Manager
Records
BankObligationsCreditChargesCreditCollateralMovementsApprovalDecisions
Effect
Decide the exact sourced financial treatment

Reconcile settlement

Accountant executes approved allocations against actual economic and cash evidence. Reimbursement clears its obligation once. Retain source currency, carrying, prior exchange and fees; uncertainty prevents reuse.

Responsible
Accountant
Status
Draft → PendingApproval
Records
BankObligationAllocationsCreditBankEventsJournalEntries
Effect
Reconcile approved obligations and actual money

Reconcile remaining scope

Trade Finance Coordinator follows documents, drawing claims and maturities with Accountant. Retain actual release and correction evidence; unresolved obligations remain visible.

Responsible
Trade Finance Coordinator
Status
Draft → PendingApproval
Records
DocumentaryCreditsCreditDrawingsBankObligations
Effect
Preserve unresolved claims and obligations
Approval required

Approve closure

Independent Finance Manager reviews documentary release or expiry evidence and reconciled drawings, obligations, collateral and charges. Expiry alone cannot close an established maturity.

Responsible
Finance Manager
Status
Draft → PendingApproval
Records
DocumentaryCreditsApprovalDecisions
Effect
Independently close reconciled credit scope
Approvals and controls

6 approvals required in this process

  • Approve request Finance Manager signs · record instrument waitsDocumentaryCredits, ApprovalDecisions
  • Review amendment Finance Manager signs when terms change · prepare presentation waitsCreditAmendments, DocumentaryCredits, ApprovalDecisions
  • Approve presentation Finance Manager signs · record bank response waitsCreditPresentations, ApprovalDecisions
  • Resolve discrepancy Finance Manager signs for protected correction or waiver · review financial effect waitsCreditDiscrepancies, CreditPresentations, ApprovalDecisions
  • Review financial effect Finance Manager signs · reconcile settlement waitsBankObligations, CreditCharges, CreditCollateralMovements, ApprovalDecisions
  • Approve closure Finance Manager signs · closes the processDocumentaryCredits, ApprovalDecisions
  • Commercial, stockInvoice approvals remain separately required.
  • Repeated presentation attempts cannot create another drawing allowance.
  • Actual bank eventsCompany cash retain distinct identities.
  • Charges and collateral cannot be expensed or settled twice.

Records and postings

StageRecordsEffect
1 Prepare request DocumentaryCreditsFinancialInstitutionsCreditConditions Prepare exact instrument and source requirements
2 Approve request DocumentaryCreditsApprovalDecisions Independently authorize the protected request
3 Record instrument DocumentaryCreditsCreditBankEvents Preserve actual bank instrument evidence
4 Review amendment CreditAmendmentsDocumentaryCreditsApprovalDecisions Review changes and retain external acceptance
5 Prepare presentation CreditDrawingsCreditPresentationsCreditDocumentsCreditAllocations Reserve eligible document and drawing scope
6 Approve presentation CreditPresentationsApprovalDecisions Authorize the current presentation instruction
7 Record bank response CreditBankEventsCreditDrawingsCreditDiscrepancies Record actual outcome and remaining maturity
8 Resolve discrepancy CreditDiscrepanciesCreditPresentationsApprovalDecisions Review protected corrective or waiver action
9 Review financial effect BankObligationsCreditChargesCreditCollateralMovementsApprovalDecisions Decide the exact sourced financial treatment
10 Reconcile settlement BankObligationAllocationsCreditBankEventsJournalEntries Reconcile approved obligations and actual money
11 Reconcile remaining scope DocumentaryCreditsCreditDrawingsBankObligations Preserve unresolved claims and obligations
12 Approve closure DocumentaryCreditsApprovalDecisions Independently close reconciled credit scope
Data model →

Process reports

All reports

LC Exposure and Deadlines

Shows issuer-issued, beneficiary-effective and confirmed amount/terms separately; divides utilized face into accepted unpaid and historically settled, adds disjoint reserved/pending claims and unused eligible face, and retains exact instrument-calendar presentation/expiry/maturity deadlines including obligations maturing after expiry.

Documentary Exceptions

Lists missing/conflicting documents, unresolved amendment/confirmation coverage, discrepancies, waiver requests, actual bank responses and unverified/unclassified events at cutoff; local approval never counts as bank acceptance or proof of goods.

Bank Funding and Collateral

Reconciles recognized CompanyPayable and BankReceivable sources separately by bank/entity/currency, actual recourse/import funding, bank-held proceeds, reimbursements and restricted cash placement/application/release; current carrying and prior FX match source controls, no asset/liability netting or duplicate cover valuation, and contingent undertakings are separately identified.

Receivables and Payables Aging

Ages live debit residuals by contractual due date at entity/currency cutoff, keeping credits/prepayments, unapplied customer funds, LC-reserved scope and disputed amounts separate; documentary coverage and recourse advances do not erase AR/AP, while actual supplier/customer settlement consumes exact source balances.

Local Financial Statements

Uses only posted balanced journals in each entity's eligible period and functional currency for trial balance, balance sheet and profit/loss, reconciling stock/WIP/GRNI/AR/AP/unapplied/credit/bank funding/held-proceeds/restricted-cash controls; no automatic group consolidation or cross-currency summation is implied.

Trade Allocation Coverage

Reconciles accepted remaining sales quantity/value to exact exclusive purchase/work/stock source families, separating active claims, executed history, released scope and genuinely uncovered demand; PO and its descendant stock are one supply family, not two units of coverage.

Run by an agent

Agent support

An assistant cannot provide a required independent human approval, decide bank compliance or invent bank issuance, customer acceptance or actual payment. It cannot reuse already claimed supply, create finished output from intermediate work or release an uncertain drawing merely because a request timed out.

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# Example after configuration $ curl -fsSL https://www.erp.ai/skill.md | paste into your agent › manage a letter of credit · prepare request on DocumentaryCredits, FinancialInstitutions, CreditConditions ✓ Trade Finance Coordinator prepares the applicant or beneficiary context, parties, banks, amount and proposed terms. › manage a letter of credit · approve request on DocumentaryCredits, ApprovalDecisions ⏸ approval · waiting for the finance manager # 10 more stages after approval: record instrument, review amendment, prepare presentation, approve presentation, record bank response, resolve discrepancy, review financial effect, reconcile settlement, reconcile remaining scope, approve closure

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