Apply Letter of credit for prepayment vendor invoice, and link prepayment with letter of credit

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Posted on by MI-25032358-0

1- purchase order total amount is 100,000 USD

2- letter of credit is 100,000 USD

3- Prepayment invoice is 50% paid by Letter of credit

4- post product receipt

5-post invoice and apply prepayment final invoice is 50,000 USD

6- make final payment using Letter of credit agreement

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Dynamics 365 Supply Chain Management

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DAnny3211 10,787 Moderator on at

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Apply Letter of credit for prepayment vendor invoice, and link prepayment with letter of credit

Hi,

To apply a Letter of Credit (LC) for a prepayment vendor invoice and link it properly in Dynamics 365 Supply Chain Management, you’ll need to ensure that both the prepayment process and LC agreement are correctly configured and associated with the purchase order.

Here’s a general approach:

Create the Purchase Order:

Total amount: 100,000 USD.

Ensure the PO is linked to the LC agreement (via the LC reference field).

Set Up Prepayment:

Define a prepayment of 50% (i.e., 50,000 USD).

Post the prepayment invoice and apply the LC as the payment method.

Link Prepayment to LC:

In the LC module, associate the prepayment transaction with the LC agreement.

This ensures the LC balance reflects the partial usage.

Post Product Receipt:

Receive goods as per the PO.

Post Final Invoice:

Invoice the remaining 50,000 USD.

Apply the prepayment to the invoice to reduce the payable amount.

Final Payment Using LC:

Use the LC agreement to settle the remaining balance.

Ensure the LC transaction is updated to reflect full utilization.

Important Notes:

The LC must be configured to allow partial payments.

Prepayment and final invoice must be linked to the same PO and LC agreement.

Use the Letter of Credit journal to track and reconcile payments.

Please verify if this helps clarify the process.

Thanks and best regards,

Daniele

Note: This response was prepared with support from Copilot to ensure clarity and completeness.

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