If it used to be we have already discussed a bit about the term of payment, and now we will discuss the letter of credit. Arguably, Letter of credit or l/c is one of the recognized method of payment secure enough in the world of manufacturing business. The payment method has indeed become an important thing, especially in terms of security. Why? Because as we know, the manufacturing business is the business of billions of transactions per day, which means any definite billions of rupiah. To that end, security is one of the things that must be considered by the perpetrator of the manufacturing industry. And a principal ataupaun employees in the manufacturing industry, it is definitely must have an understanding of the letter of credit or l/c. For that is what this article is present. Articles about letters of credit or l/c is (of course) will discuss about the letter of credit itself. Basically the Letter of credit is a payment method that involves the most secure business entities in the era of capitalism. Yep, L/C involving the BANK. Letter of credit is a letter issued by the Bank to ensure importers and exporters will get what they want according to agreement of the transaction. On the method of payment of letters of credit, the Bank will be a third-party guarantee of payment is done by the importers and exporters doing deliveries in accordance with the agreement. The Bank will keep the money from importers in advance, and it will only membayarkannya on the exporter if the exporter may indicate the shipping documents that comply with the l/c. Concept of the Letter of Credit is similar to a joint account if the online store, kaskus, and so on.
Reasons to use letter of credit
The question is, why do importers and exporters want to bother using the services of the Bank for a Letter of credit? Typically, this payment method triggers is done is because of the lack of trust between buyer and seller. The seller has delivered the goods, after fears he would not get paid. While buyers have fears, after payment, the ordered goods will not come. Well, to minimize or even eliminate the fear that is, letters of credit there. The Bank is a party that is trusted to make sure the money already paid. The Bank also is a party that is trusted to make sure the sender is sending the goods. With the existence of banks as intermediaries, buying and selling process is becoming more secure and under control. Although there remains the possibility of the parties aggrieved. It is because the Bank is simply done by checking in documents, and did not check the contents of the item thoroughly.
Illustration of the method of payment letter of credit
Importers pay money transactions to the Bank. The Bank will keep it and wait until the exporters can show shipping documents according to which written on the letter of credit. After that, the Bank will disburse an amount of an invoice issued by an exporter. Simple, not about the letter of credit? But don't forget, the Bank could issue a letter of credit is banks that could actually believed it. If carelessly, then his fate could be like shared account on Kaskus it. CMIIW. So the article on what is a letter of credit or l/c may be useful. If you have any questions, do not hesitate to write it in the comment box.