What is Letter of Credit (LC)?
A Letter of Credit is a bank guarantee ensuring a seller receives payment from a buyer, widely used in international trade to reduce counterparty risk.
What is LC?
A Letter of Credit is a document from a buyer's bank guaranteeing payment to the seller upon presentation of specified documents (shipping bill, invoice, packing list) proving shipment.
Types
Revocable, Irrevocable, Confirmed, Standby, and Revolving LCs serve different risk and repetition needs. Irrevocable confirmed LC offers maximum security to exporters.
India Context
Indian exporters and importers routinely use LCs for cross-border transactions. ERPNext's payment terms and advance payment handling can be configured for LC-based payment cycles.
Infonoxe Technologies specialises in ERPNext implementation and custom software for Indian businesses.
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