14 — Record the Buyer's LC / Contract Terms

When the buyer's bank opens a Letter of Credit — or you agree a CAD (cash-against-documents) contract — every detail in that document is a promise you must keep: which papers to present, how many copies, by which dates. The Contract Term record is where you type that promise in once. From then on the system carries it for you: when you raise the export invoice, the required documents and verification checkpoints attach themselves as a checklist, and the invoice refuses to go out until every box is ticked.

Before you start

• You have a submitted Sales Order for the deal — created in Price It, Quote It, Win It. The Contract Term is built from it.
• Keep the buyer's LC (or contract) in front of you — you will copy its numbers and dates field by field.

How the record fits into the flow:

flowchart LR
    lc["Buyer's bank opens the LC\n(or CAD contract agreed)"] --> ct["Contract Term\nLC details + required documents\n+ verification checkpoints"]
    so["Submitted Sales Order"] -->|"Create > Contract Term"| ct
    ct -->|"auto-attaches as a checklist"| si["Export Invoice\n(next section)"]

Steps

1. Create the Contract Term from the Sales Order

1. Open the deal's Sales Order (from Sales Order under Sales & Procurement in the Export Management sidebar, or type its number in the search bar at the top).
2. At the top right, open the Create menu and click Contract Term.

The Contract Term entry appears only on a submitted order — if you don't see it, submit the order first.

How you know it worked: a new Contract Term form opens, already carrying the order — the Sales Order link, the Contract Date (from the order date), the Contract Amount (from the order total), and a row for the order in the Contract Term Order table further down.

2. Fill in the top block

• Contract Date — the date the contract/LC was agreed.
• Terms Based On — choose Letter of Credit or CAD. This is the big switch: pick Letter of Credit and the whole LC Details section (next step) appears; pick CAD and it stays hidden, because a documents-against-payment deal has no LC to describe.
• Payment Term — optional link to the agreed credit terms.
• Contract Status — your own progress flag for the contract: Pending, Confirm or Done. Set it as the deal moves; nothing is blocked by it.
• To Order — tick only if the LC calls for transport documents consigned "to order" (an endorsable bill of lading); leave it unticked otherwise.
• Customer Name and Customer Address fill in from the order — just confirm they match the buyer named on the LC.

3. Copy in the LC details

With Terms Based On on Letter of Credit, scroll to the LC Details section and transcribe the buyer's LC:

Copy each field exactly as the LC states it:

• LC No, LC Opening Bank, LC Bank Address and Documentary Credit Number — the LC's identity. The bank comes from the standard Bank list; add it on the spot if it isn't there yet.
• Applicant (the buyer, who asked their bank to open the LC) and Beneficiary (you, the exporter, who gets paid under it).
• Currency and Contract Amount — the LC value. Percentage Credit Amount Tolerance records the usual "±" allowance on the amount, if the LC grants one.
• Date of Issue, Date of Expiry and Place of Expiry — miss the expiry and the LC is worthless, so get these right.
• Latest Date of Shipment — the date by which the goods must be on the water. This is the deadline your shipment work in Run the Shipment has to beat.
• Drafts At — when the draft is payable: Sight (pay on presentation) or 30/45/60/90/120 days.
• Port of Loading and Port of Discharge — as named on the LC.
• Partial Shipment and Trans Shipment — tick only if the LC permits them.
• Description Of Goods — the goods text from the LC, word for word. Banks compare documents literally, so your invoice wording must match this.

4. Confirm which order the contract covers

Scroll to the Contract Term Order table — one row per Sales Order this LC/contract pays for:

The row for your order is already there from step 1. If one LC covers several orders (a common arrangement for repeat buyers), click Add row and link the others. Total Grand Amount and Total Net Amount add the rows up when you save — and the system insists the Contract Amount in LC Details is at least the Total Net Amount, so the LC actually covers what you plan to ship.

5. List the documents the LC demands

The Export Documents table is the paper checklist: which documents you must present to the bank, and how many copies of each.

1. Click Add row.
2. In Export Document, pick the document name — the list lives in the Export Document master you saw in Exim Accounts & Masters. Type a new name and choose Create a new Export Document to add one on the fly.
3. In Number, enter the copy count the LC asks for.
4. Repeat for every document on the LC — commercial invoice, packing list, bill of lading, certificates, whatever your buyer's bank listed.

6. Add your verification checkpoints

The Document Checks table is the discipline layer — the things someone must positively confirm before the paperwork leaves your office:

Add a row per checkpoint, picking from the Document Check master (also seeded in Exim Accounts & Masters; create new entries inline, same as before). Good checkpoints are the ones that catch expensive mistakes: LC terms verified, shipment within latest shipment date, documents submitted to bank.

The Amount Allowed To and Amount Allowed From fields below the table appear only for Letter of Credit deals — leave them at zero unless the LC grants an explicit drawing band above or below the contract amount.

These aren't decoration. Every row you add here — and every document row from step 5 — reappears on the export invoice as a checkbox, and the invoice cannot be submitted until all of them are ticked.

7. Save

Click Save.

How you know it worked: the form gets a name like CT-00002 in the title bar, and the Total Grand Amount / Total Net Amount fields under the order table fill in. If the system objects that "Contract Amount should not be less than Total Net Amount", the LC value you typed in step 3 doesn't cover the orders you linked in step 4 — fix whichever is wrong.

What this buys you at invoice time

You're done for now — the payoff comes in Raise the Export Invoice. There, picking this record in the invoice's Contract and LC field pulls both tables in automatically as a live checklist:

The invoice offers only contract terms that actually cover its sales orders — so record the Contract Term as soon as the LC arrives, and the right checklist is waiting when billing day comes.