1. Check that you have incorporated all costs, including bank transaction charges and confirmation fees (where applicable), into the final sales price. Ask your own bank for a copy of their trade services tariff. We have produced a guide to bank charges which you may find helpful. Please note that this is a general guide based on the tariffs of several UK based banks and may not be representative of all global banks.
  1. Send a suggested letter of credit format to your customer prior to issuance by the bank. Agreeing to the terms at this stage may help to avoid costly amendments, delays and discrepant documents later. A template for requesting a letter of credit together with other useful free resources can be found here.
  1. Find out which bank is to issue the letter of credit. If you have any doubts over the standing of the issuing bank and / or the political risk represented by the country of the buyer, request that the letter of credit is ‘confirmed’ by a major bank in the beneficiary’s country.
  1. Upon receipt of the letter of credit, check all the terms immediately. If you are unable to comply, request the buyer to issue an amendment without delay.
  1. Ensure that you ship the goods and present all documents to the bank within the timescales stipulated in the letter of credit. All documents presented must comply with the letter of credit and data contained therein must not conflict with either the credit terms or other documents.

The above tips are provided as a general guide and are by no means exhaustive.

We recommend that to minimise risks and costs associated with letters of credit, you consider training all your key personnel involved in the letter of credit process, including sales, finance, shipping and customer services staff.

Check out our Letter of Credit Training for Exporting Companies.