Letters of Credit guarantee International payments to exporters

Yet many companies will not use them.  A lot of organisations will reject the opportunity to export if a Letter of Credit (also known as a Documentary Credit) is involved due to concerns about messing up the documentation and jeopardising their payment.

Point to Point Export Services can provide a safety net, to provide a Documentary Credits insight, offer a guide to Documentary Credits and give organisations confidence to accept business that may have been rejected in the past.  We can assist by explaining Documentary Credits law and practice and help organisations get paid if a Documentary Credit is proposed as the method of payment.

So what is a Letter of Credit/Documentary Credit?

Essentially it is a set of written instructions, usually used in importing or exporting, advising the seller what the buyer is purchasing – the type and quantity of goods, the dates and method of shipment, and the documentation required.

Letters of Credit can only be issued by the buyer (known as the Applicant) who must go through a financial organisation to open the Credit (they are known as the Issuing Bank).  The Issuing Bank then sends the Credit to a correspondent bank in the country of the Seller (known as the Advising Bank) who then send the Credit to the seller (known as the Beneficiary).

The instructions on the Letter of Credit can sometimes be confusing and presenting the right documents, in the right quantities, specifications and ensuring they meet the relevant rules, can be daunting to anyone not trained in completing Letters of Credit.

What can we do to help?

Point to Point Export Services offers a way to negotiate through the complications to help companies present compliant documents.  There are four ways we can assist.

– We can provide Letter of Credit training to staff, thus increasing the organisation’s knowledge base.

– We can complete the documents on an organisation’s behalf.

– We can offer a checking process if the documents are completed in-house but need an independent eye to check for those little errors.

– Or, if you just want some general information about Letters of Credit, do check out our blog page under Exports – Letters of Credit, for advice and comments on certain aspects of Letter of Credit use.

Please do contact us at info@point-point.com for more information or to find out how we can ensure you can get paid with Letters of Credit.