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FITA TradeDoX 360

Documentary Credit Challenges – The Problem

Letters of credit are one of the most preferred payment and financing mechanisms for international trade. The security and risk mitigation provided through Letters of Credit make them indispensable in international cross-border transactions. However, statistics prove that 60% to 80% of the documents presented to banks do not comply with the L/C and contain errors thereby delaying payments or refusal by the negotiating bank altogether.

Also there are additional costs and challenges, including:

  • Complicated and lengthy application process
  • High susceptibility to errors due to multiple parties involved in producing required documentation.
  • Delays in conducting the transaction due to the long issuance process
  • Strict and often complex documentary requirements.
  • The compliance requirements of both the export and import countries involving differing terminology, documents and procedures makes the process time consuming, complex and prone to errors.

It is clear that the international trading community needs a system to streamline the export/import logistics, documentation and compliance process which reduces these problems.

Solution

Documentary Credits or LCs are opened through Banks, creating a disconnection with the underlying order. This usually results in frequent Documentary Credit amendments that increase costs, discrepancies and turnaround time.

TradeDoX’s Documentary Credit Collaboration module re-engineers the process of applying for a documentary credit. The Importer and exporter collaborate on the terms of the Documentary Credit, ensuring that the details are agreed before the Importer requests payment guarantees from its Bank.

Reconciliation and synchronization between collaboration versions of data and critical supporting documents including transport documents, invoices, packing list, and others ensures 100% consistency at time of presentation. Collaboration is tied to the order so that any changes are applied immediately to the credit terms, thus reducing the risk of discrepancies and the need to manage amendments through the banking system.

All documents are generated based on the Letter of Credit terms, making use of business partner profiles, electronic data transmission and templates to minimize data entry. Paper and electronic distribution of Letter of Credit documentation can be made to banks, trading partners or any service provider. All documents are UCP500 and eUCP compliant.

Enables shipper to get paid quickly by delivering trade finance documents that are conformant with the bank's terms.
Accelerates advice of LCs and amendments and virtually eliminates discrepancies.
 
 
Collaboration - Key benefits Powerful features

  • In-line negotiation facilities that allow both parties to confirm, reject and request terms of the credit details before involving Bank partners
  • In-line comparison of requests – no more “Risky stare and compare”
  • Accurate Review Control: Parallel review process allows both the importer and exporter to make changes simultaneously.
  • Complete Visibility: Document audit reports provide complete history of all document and collaboration version changes.
  • Secure transmission and Non-repudiation /document Security: The collaboration files are highly secured as TradeDoX generates those using AES also known as Rijndael Cryptography adopted as an encryption standard by the US Government. 
  • Growing library of documents ready for immediate use. Standard documents include: Commercial Invoice, Shippers Letter of Instruction, Bill of Lading, Master Air Waybill, Certificate of Origin, Packing List, NAFTA, SED, EUR1, SAD, Invoice, Picking List, IATA, & hundreds of country specific documents – all free!
  • UCP500 & eUCP Compliant: Generate LC documents that are eUCP¹ compliant and meet the new international banking guidelines for online presentations.

The TradeDoX Pro can be customized to create ANY type of client specific documents. (We currently have over 1300 trade documents in our library which you can pick and choose from and send to us and we will integrate them for you FREE of charge [the entire process is online]) If we do not have the document you require in our library, we will create one for you, again– FREE. Email a scanned copy of your document to: newdoc@tradev.net. Please note that we will require a translated version if the document is in a foreign language other then English, i.e. please translate the field’s text in English in a separate or same document.

Important Note

TradeDoX 360 Pro software is installed and resides in your computer system. The company data is also stored, controlled and managed locally in your computer system. Some software vendors provide the software through an Internet connection and your company data is stored on their Internet server. The TradeDoX 360 software is controlled and managed by you and you alone. No one has access to your company data, except you and the ones you have authorized. This makes the operation of the TradeDoX 360 software faster and more secure.

See more benefits Register and get your FREE FITA Sponsored copy now.

 


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