Presentations and payment
An LC Presentation records one presentation of documents under a credit: who presented, when, the amount claimed, the bank's examination, any discrepancies and their fee, a waiver or a refusal, and the payment. It works out the bank's examination deadline under UCP 600, the net proceeds and the payment due date.
To open the list: Trade Finance › Credits › LC Presentation.
1. Two directions
| Credit | Presented by | You |
|---|---|---|
| Sale (export) | Us (Beneficiary): your own document set to the buyer's bank | Want clean documents and payment |
| Purchase (import) | Supplier (Beneficiary) or the Negotiating Bank: the supplier's set to your bank | Check the supplier's documents before your bank pays |
2. Prerequisites
- The credit is Issued or Advised, with its B/L Date and Presentation Deadline.
- The document set is issued (for your own presentation) or received (for the supplier's).
3. Record a presentation
- On the credit, click Present Documents (credit state Presented).
- Trade Finance › Credits › LC Presentation, New:
- Title, Letter of Credit, Presentation No., Presented By, Presented On, Courier AWB.
- Currency and Amount Claimed (the invoice amount).
- Documents Presented: for example Full 46A set: invoice, 3/3 B/L, five surveyor certificates, beneficiary's certificate.
- Save. The app works out:
- Bank Examines By: five banking days (Monday to Friday) after presentation, under UCP 600 article 14b.
- Payment Due: the examination deadline for a sight credit; presentation date plus the usance days for a usance credit.
- A warning if it was presented after the credit's presentation deadline (the bank may refuse it as late).
4. Examination
| Step | Action | Who |
|---|---|---|
| Received | Start Examination | Trade Finance Executive |
| Checking | Accept | Trade Finance Executive, Trade Finance Manager |
| Checking | Mark Discrepant | Trade Finance Executive |
| Discrepant | Re-present Corrected Documents | Trade Finance Executive, Documentation Executive |
| Discrepant | Request Applicant Waiver | Trade Finance Manager |
| Waiver Requested | Waiver Received (not the requester) | Trade Finance Manager |
| Waiver Requested | Refuse | Trade Finance Manager |
| Accepted | Record Payment | Trade Finance Manager, Treasury Manager |
4.1 Discrepancies
Add one row per discrepancy in Discrepancies: Document, LC Clause (for example 47A.8), Discrepancy (for example Shows the notify party), Severity (Minor, Major), Resolution (Open, Corrected, Waived, Accepted by Bank).
- While any discrepancy is Open or Waived, the credit's Discrepancy Fee per Set (for example USD 100) is charged and shown in Discrepancy Fee.
- An open discrepancy moves a received or checking presentation to Discrepant.
- Correct the document within the presentation period and Re-present Corrected Documents, marking the row Corrected; or ask for the applicant's waiver.
The discrepancies normally come from the document checks of the document set, which apply the same 46A and 47A rules before you present.
4.2 Waiver
- Request Applicant Waiver and fill Waiver requested from the applicant on. The presentation shows Waiver Requested.
- When the applicant agrees, fill Applicant Waiver Received, mark the discrepancies Waived, and click Waiver Received (a second manager). The presentation is Accepted; the discrepancy fee stays deducted.
- If the applicant refuses, click Refuse.
4.3 Refusal timing (UCP 600 article 16)
If the bank sends a notice of refusal, enter Refusal notice received on. Refusal notice shows:
- In Time: the notice came within the five banking days of examination.
- Late - Bank Precluded: it came after; under UCP 600 article 16f the bank may no longer claim the documents are discrepant, and the app warns you.
5. Payment
- Enter Bank charges deducted (71D) if the bank deducted any.
- Net Proceeds = amount claimed − discrepancy fee − bank charges.
- When the money arrives (or is paid), fill Amount Paid and Paid On: the presentation becomes Paid. Click Record Payment on the presentation and on the credit.
- The trade's Bank Charges and Fees become the total of its presentations' charges and discrepancy fees, and its Realised Margin is worked out again.
The payment in the books is recorded from the commercial settlement (Record the payment), referenced to the credit number.
Example: under the sale credit you claim the invoice amount, USD 3,984,542.10 (within the credit's maximum of USD 4,322,175). Clean documents, bank charges of USD 6,850: net proceeds USD 3,977,692.10, paid at sight. The trade's realised margin falls by the same 6,850 to USD 168,077.47.
6. Sale and purchase timing
Present your own set under the sale credit before its deadline, and examine the supplier's set under the purchase credit so that you pay only against documents that will also pass under the sale credit. Copying the sale credit's 46A and 47A into the purchase credit (an automation rule) makes both sets meet the same rules.