What is confirmed letter of credit in SAP SD-FT - Foreign Trade?

SAP Term: confirmed letter of credit

• Component: SD-FT

• Component Name: Foreign Trade

• Description: A confirmation that you the exporter will be paid "at sight" by your bank. This occurs no matter what happens to the importer applicant or the importer's bank bank opening bank as long as you conform to the letter of credit.

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• Key Concepts: 
  A confirmed letter of credit is a payment method used in international trade. It is a guarantee from a bank that the buyer will pay the seller for goods or services provided. The bank issuing the letter of credit will confirm the payment to the seller, even if the buyer fails to pay. This provides security to both parties in the transaction. 
  
  How to use it: 
  In SAP, a confirmed letter of credit is used in the Foreign Trade module (SD-FT). The buyer and seller must agree on the terms of the letter of credit before it can be issued. Once it is issued, the buyer must provide all necessary documents to the bank in order for the payment to be released. The seller must also provide documents to prove that they have fulfilled their obligations under the agreement. 
  
  Tips & Tricks: 
  When using a confirmed letter of credit, it is important to ensure that all documents are accurate and complete. This will help to avoid any delays or disputes in payment. It is also important to ensure that all parties involved are aware of their obligations under the agreement. 
  
  Related Information: 
  For more information on confirmed letters of credit, please refer to SAP Help Portal: https://help.sap.com/viewer/product/SAP_ERP_SD_FT/6.0/en-US