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Liquidate, extend, or cancel a letter of guarantee [AX 2012]

Updated: November 27, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012

You can request to cash out a letter of guarantee, extend its validity, or cancel the agreement. Use the Create quotation, Sales quotation, Sales order, Purchase order, or Project details forms to initiate requests for cashing out, extending the validity, or canceling the letter of guarantee.

After initiating the request, use the Letter of guarantee form in Bank to cash out, extend, or cancel a letter of guarantee.

You can request to cash out a letter of guarantee that has a status of Given to beneficiary.

Click Procurement and sourcing > Common > Purchase orders > All purchase orders. Select a purchase order line and on the Action Pane, on the Manage tab, in the Bank document group, click Letter of guarantee.

–or–

Click Sales and marketing > Common > Sales quotations > All quotations. Double-click a sales quotation line to open the Sales quotation form. On the Action Pane, on the Quotation tab, in the Bank document group, click Letter of guarantee.

–or–

Click Sales and marketing > Common > Sales orders > All sales orders. Double-click a sales order line to open the Sales order details form. On the Action Pane, on the Manage tab, in the Bank document group, click Letter of guarantee.

–or–

Click Project management and accounting > Common > Quotations > Project quotations. Double-click a project quotation line to open the Project quotation details form. On the Action Pane, on the Quotation tab, in the Bank document group, click Letter of guarantee.

–or–

Click Project management and accounting > Common > Projects > All projects. Double-click a project line to open the Project details form. On the Action Pane, on the Project tab, click Letter of guarantee.

  1. Click Liquidate to open the Liquidate letter of guarantee drop dialog.

  2. Click OK to request that the letter of guarantee value be cashed out. The Facility status field of the request is updated to Request liquidate.

To liquidate a letter of guarantee, the beneficiary must submit the original letter of guarantee and inform the bank of the principal’s default prior to the expiration date. The bank then pays the amount due to the account of the beneficiary, as agreed in the letter of guarantee.

  1. Click Cash and bank management > Common > Letters of guarantee.

  2. In the left pane, select the request with the status Request liquidate and click Liquidate to open the Liquidate letter of guarantee drop dialog.

    The Value field displays the total current value. If the value is increased or decreased, the updated value is displayed.

    The margin amount is calculated as the amount specified in the Value field multiplied by the percentage specified in the Cash margin field in the Bank facility agreements form and displayed as Margin. If you have specified a fixed amount instead of a percentage in the Bank facility agreements form, the fixed amount is displayed in this field.

    The Expense field displays the total of all incurred expenses as current expenses.

  3. Click OK to liquidate the letter of guarantee to the beneficiary. Journal entries are posted to the accounts specified in the Bank documents posting profile form using the daily journal specified in the Transaction journal field in the Cash and bank management parameters form. The status of the request is updated to Liquidated.

    Once liquidated, you cannot perform any further transactions on the letter of guarantee.

You can request to extend the validity of a letter of guarantee that has a status of Given to beneficiary.

Click Procurement and sourcing > Common > Purchase orders > All purchase orders. Select a purchase order line and on the Action Pane, on the Manage tab, in the Bank document group, click Letter of guarantee.

–or–

Click Sales and marketing > Common > Sales quotations > All quotations. Double-click a sales quotation line to open the Sales quotation details form. On the Action Pane, on the Quotation tab, in the Bank document group, click Letter of guarantee.

–or–

Click Sales and marketing > Common > Sales orders > All sales orders. Double-click a sales order line to open the Sales order details form. On the Action Pane, on the Manage tab, in the Bank document group, click Letter of guarantee.

–or–

Click Project management and accounting > Common > Quotations > Project quotations. Double-click a project quotation line to open the Project quotation details form. On the Action Pane, on the Quotation tab, in the Bank document group, click Letter of guarantee.

–or–

Click Project management and accounting > Common > Projects > All projects. Double-click a project line to open the Project details form. On the Action Pane, on the Project tab, click Letter of guarantee.

  1. Click Extend letter of guarantee to open the Extend letter of guarantee expiration date drop dialog.

  2. In the New expiration date field, enter the new expiration date for extending the letter of guarantee.

  3. Click OK. The Facility status field of the request is updated to Request extend.

  1. Click Cash and bank management > Common > Letters of guarantee.

  2. On the left pane, select the request with the status Request extend, and click Extend to open the Extend letter of guarantee expiration date drop dialog. The Expiration date field displays the expiration date specified when the request to extend the letter of guarantee was made.

  3. In the Expense field, enter the extension commission charged by the bank. The expense amount is calculated as the amount specified in the Value field multiplied by the percentage specified in the Extension commission field in the Bank facility agreements form and displayed in this field. If you specified a fixed amount instead of a percentage in the Bank facility agreements form, the fixed amount is displayed in this field. You can modify this amount if required.

  4. Click OK to extend the validity of the letter of guarantee. Journal entries are posted to the accounts specified in the Bank documents posting profile form using the daily journal specified in the Transaction journal field in the Cash and bank management parameters form. The status of the request is updated to Extended.

You can request to cancel a letter of guarantee with a status of Given to beneficiary. A letter of guarantee can be canceled when the validity of the letter ends. To cancel a letter of guarantee, the beneficiary must submit the original letter of guarantee and request that the bank cancels it. Once it is canceled, you cannot perform any further transactions on the letter of guarantee.

Click Procurement and sourcing > Common > Purchase orders > All purchase orders. Select a purchase order line and on the Action pane, on the Manage tab, in the Bank document group, click Letter of guarantee.

–or–

Click Sales and marketing > Common > Sales quotations > All quotations. Double-click a sales quotation line to open the Sales quotation details form. On the Action Pane, on the Quotation tab, in the Bank document group, click Letter of guarantee.

–or–

Click Sales and marketing > Common > Sales orders > All sales orders. Double-click a sales order line to open the Sales order details form. On the Action Pane, on the Manage tab, in the Bank document group, click Letter of guarantee.

–or–

Click Project management and accounting > Common > Quotations > Project quotations. Double-click a project quotation line to open the Project quotation details form. On the Action Pane, on the Quotation tab, in the Bank document group, click Letter of guarantee.

–or–

Click Project management and accounting > Common > Projects > All projects. Double-click a project line to open the Project details form. On the Action Pane, on the Project tab, click Letter of guarantee.

  1. Click Cancel to open the Cancel letter of guarantee dialog.

  2. In the Cancellation reason field, enter a reason for requesting cancellation of the letter of guarantee.

  3. Click OK to request cancellation of the letter of guarantee. The Facility status field of the request is updated to Request cancel.

When the purpose of the letter of guarantee no longer applies, you can end the agreement. After canceling an agreement, you can take no further action on the letter of guarantee. The bank returns the margin amount when it cancels a letter of guarantee.

  1. Click Cash and bank management > Common > Letters of guarantee.

  2. Click Cancel on the Letter of guarantee form to open the Cancel letter of guarantee dialog. The Margin field displays the payment amount reserved by the bank. This amount is refunded to the principal.

  3. Click OK to cancel the letter of guarantee. Journal entries are posted to the accounts specified in the Bank documents posting profile form using the daily journal specified in the Transaction journal field in the Cash and bank management parameters form. The status of the request is updated to Cancelled.


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