What is negotiating bank in SAP SD-FT - Foreign Trade?

SAP Term: negotiating bank

• Component: SD-FT

• Component Name: Foreign Trade

• Description: A financial institution that arranges for and handles a letter of credit.

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• Key Concepts: 
  A negotiating bank is a financial institution that acts as an intermediary between the buyer and seller in a foreign trade transaction. It is responsible for handling the payment and other financial aspects of the transaction, such as currency exchange and risk management. The negotiating bank is typically chosen by the buyer and is usually located in the buyer's country. 
  
  How to use it: 
  In SAP, the negotiating bank is set up in the SD-FT Foreign Trade module. This module allows users to define the bank details, such as name, address, and contact information. The bank can then be assigned to a specific foreign trade transaction, such as an export or import. 
  
  Tips & Tricks: 
  When setting up a negotiating bank in SAP, it is important to ensure that all of the necessary information is entered correctly. This includes the bank's name, address, and contact information. Additionally, it is important to ensure that the correct currency exchange rate is used for each transaction. 
  
  Related Information: 
  The SD-FT Foreign Trade module also allows users to set up other financial institutions, such as banks for payment processing and clearing houses for risk management. Additionally, users can set up payment terms and conditions for each foreign trade transaction.