Documentary credit is an instrument for making international trade easier for exporters and importers. However, it has been widely criticized because they make some operations more complex, they involve a great number of people in the process, they clog administrative pipes, the processes are too rigid, and there is not enough automation of tasks.

An operation of export credit is prepared in advance starting with the trade negotiation with the client. Remember that the bank will refuse payment if the terms and conditions of documentary credit are not met.

Here are the steps necessary for the proper conduct of operation:

Negotiate, negotiate, negotiate. Make sure that you agree with the importer of what conditions to set for the deal from the very beginning. Remember to look for realistic and convenient banks, deadlines, costs and forms of payment.

Request an instructive on how to open documentary credit. This model should include a sample of letter of credit or whatever type of documentary credit you will be creating.

Reception of documentary credit. Once the bank has notified the credit, you must look at the terms and conditions mentioned in the credit. Make sure that a restrictive clause is not included.

Find out how and when you should make changes to the documentary credit. Life happens and some exporters are not able to fulfill the importers expectations. Ask your client when and how modifications can be made.

When you receive the last draft of documentary credit, make sure you read the fine print and understand all that it implies. Make changes before it is validated. If you are content with the content of the document, you can proceed to the shipment of the merchandise.

Before opening and charges, the documentary credit is compared from exporter and importer to make sure everything is the same.

If you were to underline something, pay attention to deadlines, amounts, currencies, exchange rates and of course to the content of the document itself.

If the bank were to find a problem in the shipment or the product, it will refuse to send payment. If you find there are errors in the document, make sure you talk with the issuing bank to solve this.