1. If I ship goods, will you pay? Documentary Credits like a “Letter of Credit” or “L/C” is the most preferred form of payment for goods in international trade as it solves issues of mutual mistrust by using banks as arbiters. Exporter Importer If I pay, will you ship the goods? CONTRACT OF SALE | the current way 1 Ok, I’ll ask my bank to open a L/C Great! Akshay Samant
2. DISCUSS TERMS OF SALE | the usual way 2 Great! Importers and Exporters figure out the terms of the LC through phone calls, faxes, emails and various other channels of communication. Also various departments from both sides may communicate with their counterparts during the process and further complicate matters.
4. IMPORTER APPLIES FOR LC | the usual way 3 I’d like to open an L/C. Can you help me with the application? You know that Banks do not deal in the merchandise that the LC covers. Banks only deal in documents Yeah Yeah Payment will only be made if all terms and conditions are met and there are NO discrepancies! That’s the Exporter’s headache not mine! Traditional Documentary Credits are opened through Banks, creating a disconnection with the underlying order. This results in frequent Documentary Credit amendments that increase costs, discrepancies and turnaround time.
5. LC ISSUED TO EXPORTER | the usual way 4 Exporter gets the goods ready for shipment and prepares the documents required by the LC
6. DOCUMENTATION ISSUES | the usual way 5 oopS BIG oops Can I request for amendments and delay the shipment?? THE L/C SAYS WHAT IT MEANS & MEANS WHAT IT SAYS Goods description is not as per L/C B/L not endorsed Insurance coverage not sufficient Tenor is incorrect Freight payment not as per LC Port is incorrect Description not consistent B/L notify party incorrect DID YOU NOT COLLABORATE PROPERLY?? statistics prove that 60% to 80% of the documents presented to banks do not comply with the L/C and contain errors thereby delaying payments or refusal by the negotiating bank altogether
7. THE NEED FOR AMMENDMENTS | the usual way 6 Amendments? Delayed shipment! = Lost customers! I wish I had made it my headache! I wish there was a structured way to collaborate BEFORE involving banks
8. There is a better way! Its called the TradeDoX Documentary Collaboration Module
9. CONTRACT OF SALE | the TradeDoX360 way 1 Awesome! Documentary Credits like a “Letter of Credit” or “L/C” is the most preferred form of payment for goods in international trade as it solves issues of mutual mistrust by using banks as arbiters. Exporter Importer I’ll open an LC Lets collaborate on the terms through TradeDoX Before I go to the bank 1
