The integration of software solutions in LC management has undoubtedly enhanced efficiency, reduced risks, and improved transparency in international trade transactions. As businesses continue to navigate the complexities of global trade, leveraging technology will remain crucial in optimizing LC processes and driving growth. The software diagram serves as a testament to the evolving landscape of LC management, emphasizing the importance of innovation in shaping the future of international trad

2. What is LC ?
A letter of credit is a letter from a bank
guaranteeing that a buyer’s payment to a seller will
be received on time and for the correct amount. If
the buyer is unable to make a payment on the
purchase, the bank will be required to cover the full
or remaining amount of the purchase. It may be
offered as a facility (financial assistance that is
essentially a loan)

3. Purpose
A. It reduces the risk of non-paying buyers
B. It helps buyers prove their solvency
C. You can customize your LC
D. It helps sellers manage their cash flow
E. It is quick to secure

4. Working process
1. First purchase order or order must be created
2. PI must be created (by communicating with 2 companies or by communicating with the bank)
3. The bank will open LC with an LC opening charge
4. Communicate with the vendor to confirm the expected delivery date of the product.
5. In addition, the vendor's bank and the company's bank will communicate regarding the payment.
6. The vendor can provide its products per shift
7. Payment of vendor will be through bank
8. Depending on the vendor's policy for product supply, some vendors require full payment upfront, while others accept payment upon
supply. Some may even require payment long before the product is supplied
9. After the product arrives at the port, the company must transport it to the warehouse, incurring various costs associated with the port
10. The product has to be insured
11. To calculate the total purchase cost, add the purchase cost of the product to the other associated costs. What is the unit cost of the
product
12. Often, the vendor receives a Letter of Credit (LC) or a bank loan. Subsequently, the company makes the payment, and the bank provides
an advanced LC margin
13. Once all the products are in stock, the Purchase Invoice (PI) should be finalized. The vendor must then make the full payment, and any
Letter of Credit (LC) margin should be settled. If there is a bank loan (LTR), the associated bank account should be closed
Noted: There may be more rules

5. Simple Foreign Purchase Calculation or LC
1. Example: Purchase total value 5000 tk , Dollar =55.55 ₴ , Dollar Rate=90
Product cost=4000,LC opening bank Charge=100, LC margin=200, Tax Invoice=50, Handling
Charge=50 , Miscellaneous=400, other exp=200
2.Example:PI product Cost=4000,LC Opening bank Charge=100, LC margin=200,LTR=200

6. LC process
Purchase Order
proforma
invoice (PI)
LC Opening
expenses
(voucher with
Dollar)
Cost Sheet Pre import in
Import
Confirmation
Foreign
voucher

7. Letter of Credit (LC)
LC
Inventory
Purchase
Order (PO)
Proforma
Invoice(PI)
Cost Sheet
Pre-Import
Stock
Import
Confirmation
Accounts
Foreign
voucher

8. Opening Expense

9. Purchase Order

10. Purchase Order Check list
 Auto purchase order date, time tracking
 purchase order select from product list box
 purchase order quantity, units and rate(dollar) input provision
 purchase order review, edit, add, update, print options
 Purchase order approval
 Shipment mode
 port of loading country
 port of loading
 delivery /ship to
 port of Discharge country
 port of discharge
 Expected Shipment date
 Terms & Condition

12. Proforma Invoice Check list
 Auto PI date, time tracking
 proforma Invoice NO
 purchase order select from product list box
 PI quantity, units and rate(dollar) input provision
 PI review, edit, add, update, print options
 PI approval
 Incoterms
 Ref number PO
 Shipment mode
 Terms & Condition
 Unit CBM

13. Cost Sheet

14. Cost Sheet Check list
 Import No
 P. Invoice No
 L/C No
 LC Date
 LC Expiry Date
 Importer
 Importer's Bank
 Supplier's bank
 Bank Charges
 Insurance
 Duty
 LTR Interest
 CNF
 Freight Charge
 Handling Charge
 Over Head
 Miscellaneous
 Other Expense
 Inv (Foreign
 Inv (TK)
 Tax Invoice
 ETC

15. Pre Import Stock In

16. Pre Import Check list
 Auto Pre Import date, time tracking
 Pre Import NO
 Pre Import select from product list box
 Pre Import quantity, Rate (Dollar and Bangla) and rate input provision
 Pre Import review, edit, add, update, print options
 Pre Import approval
 Supplier
 Bank

17. Import Confirmation

18. Import Confirmation Check list
 Import In No
 part Shipment
 LTM/LTR/LC No
 Part Shipment No
 Purchase Ref No
 Import Confirmation select from product list box
 Import Confirmationreview, edit, add, update, print options
 Import Confirmation approval
 Supplier

19. Purchase voucher

20. Thanks For Watching
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