What is 'guarantee of payment' in SAP SD-FT - Foreign Trade?

guarantee of payment - Overview

• Component: SD-FT

• Component Name: Foreign Trade

• Description: A method of payment used for import and export. Documents are provided to a bank or to a subsidiary of the exporter in the importer's country to obtain payment for goods. There is no letter of credit and no protection. The customer can cancel the order. This method of payment is used for trusted customers who are not trusted with an "open account."

guarantee of payment - Details

• 
  Key Concepts: 
  A guarantee of payment is a document issued by a bank or other financial institution that guarantees payment of a certain amount of money to a seller in the event that the buyer fails to pay. In SAP Foreign Trade, this document is used to guarantee payment for goods and services exported from one country to another. 
  
  How to use it: 
  In SAP Foreign Trade, the guarantee of payment is used to ensure that the seller will receive payment for goods and services exported from one country to another. The guarantee of payment is issued by a bank or other financial institution and is typically valid for a certain period of time. The buyer must provide the guarantee of payment before the goods or services are shipped. 
  
  Tips & Tricks: 
  When issuing a guarantee of payment, it is important to ensure that all relevant information is included in the document, such as the amount of money being guaranteed, the period of validity, and any other conditions that may apply. It is also important to ensure that the document is signed by both parties before it is sent. 
  
  Related Information: 
  For more information on guarantees of payment in SAP Foreign Trade, please refer to the SAP Help Portal or contact your local SAP representative.