Letter of Guarantee
The guarantee as the bank issued it: under which agreement and facility, for which beneficiary, for what value, until when it can be claimed, and the margin and expense. It can be made from a Request for Letter of Guarantee. It is a register: nothing posts from it.
What it is for
It keeps every guarantee the company has outstanding, so treasury knows what is committed with which bank and when each expires.
The rules people get wrong:
- It posts nothing. The screen carries a Transaction Journal, a Posting Status and an Accounting tab, but Save does not post any journal entry. Margin and expense must be posted on their own documents.
- The value is not checked against the facility limit of the agreement.
Every field in plain words
Header
| Field | What it means | What to put |
|---|---|---|
| Transaction | The guarantee number | Given on Create. Save refuses a number already used |
| Posting Date | The guarantee's date | Required. Sets the Financial Year and Financial Period |
| Transaction Journal, Journal, Journal Indicator, Posting Status | Journal details | Recorded only; nothing posts |
| Notes | Free text | Optional |
| Financial Year, Financial Period | The fiscal year and period of the Posting Date | Filled by themselves |
Request
| Field | What it means | What to put |
|---|---|---|
| Request No | The request this guarantee answers | Optional. Picking a request copies its facility group, facility type, currency, dates, beneficiary, responsibility and assignment fields, and locks them. Clearing it empties and unlocks them. The lookup lists every request, whatever its status |
| Date | The request date | Required |
Bank Facility, Value and Validity
| Field | What it means | What to put |
|---|---|---|
| Facility Group | The group | From Bank Facility Group |
| Facility Type | The facility | Only the facilities of the group picked |
| Currency | The guarantee currency | Optional |
| Value | The guarantee amount | Required |
| Date From, Date To | The period covered | Optional |
Bank Processing Details
| Field | What it means | What to put |
|---|---|---|
| Agreement | The facility agreement it is drawn under | Required. From Bank Facility Agreement |
| Bank | The issuing bank | Required |
| Bank Reference No | The bank's guarantee number | Optional |
| Submit Date | When the request went to the bank | Optional |
| Date of Expiry | When the guarantee expires | Optional |
| Claim Date | The last date the beneficiary can claim | Optional |
| Expense | The bank's charges | Recorded only |
| Margin | The cash margin the bank holds | Recorded only |
| Handler | Who handles it | Optional |
Responsibility, Beneficiary and Assignment
Responsibility Central and Responsible; Beneficiary Type (customer or vendor, required), Beneficiary no (required; the lookup follows the type) and Beneficiary name; Business Area, Business Unit and Project.
Schedule, Details and Accounting tabs
- Schedule. Interest Payment Start Date, Installment Amount and No. of Installments are shown, but they are not kept when you save in this version. The repayment fields of this tab do not appear.
- Details. Lines for, date, value, status and text. Not kept with the guarantee when you save in this version.
- Accounting. Account, name and line text. Kept, but nothing posts from them.
How to configure it
The screen allows Create, Edit and Delete. It has no Reverse: nothing is posted to undo.
Scenarios
- A contractor's performance guarantee. Pick the request, then the agreement and bank, type the bank's reference, the expiry and claim dates, and the margin. Keep Date of Expiry and Claim Date filled: they are what treasury follows up.
What it is connected to
- Request for Letter of Guarantee - the request it answers.
- Bank Facility Agreement, Bank Facilities, Bank Facility Group, Bank.
- Lists and reports - the Letter Of Guarantee list.
If something looks wrong
- The guarantee is not in the general ledger. Expected: this screen posts nothing.
- The interest schedule or the Details lines are empty after saving. They are not kept in this version.
- The fields copied from the request cannot be changed. They are locked while a Request No is picked. Clear the Request No to edit them; they empty as well.
- The Letter Of Guarantee list is empty. The list shows only guarantees that have Details lines, and Details lines are not kept in this version, so it finds none. Use the screen's own document list instead.