How to handle Letter of Credit (LC) in ERP

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I put up this question in LinkedIn

I have a practical question for the Oracle EBS Financials experts out there. Here is the business scenario. How do you handle this in Oracle?

Let us say you do an import based on an LC. You enter a future dated payment in the system, with the date of 1st November 2021. As the mid of October arrived, you realize that you have a cash crunch. You do one of the three things. One, get an extension from the vendor to 1st December, two, change your bank to one where cash is available or three, do both of them. My understanding is that In Oracle EBS, once the future dated payment is entered in the system, you cannot do any of this. But this is a regular business scenario. How to handle this in EBS?

As usual, the best answer I got is from Siva Ganeshan

Dear Ramaswamy, The LC is not recorded as Future Payment. We created a Custom Screen (Solution) to manage the complete LC Limit Sanctioned, Utilised and Balance amount available for each bank with whom we availed LC facility and integrated to Payable. It is not hard customization of Core Payable applications. If you check full LC Process, the banker is only going to make payment to Supplier on due date based on the LC limit sanctioned to you before and You don't make payment on due date.Hence you don't need to create a Future Dated Payment. The Banker will intimate and debit your bank account from the LC limit to your bank account and it is reflected in your bank statement. Then only you record this transaction in Payables as Payment because Exchange Rate to everything will change on due date, 

Thank you Siva....