L/C (Letter of Credit)

Customer management L/C (Letter of Credit) refers to a letter of credit, which is a written document issued by a bank at the request of the buyer (applicant) to the seller (beneficiary), guaranteeing payment under certain conditions. In foreign trade customer management, L/C is often used for new customers or large orders to replace commercial credit with bank credit, reducing the seller's risk of non-payment. Usage scenarios include: first-time cooperation, unclear buyer credit, or large transaction amounts. Precautions: The seller must strictly review the L/C terms to ensure consistency with the contract and document compliance, otherwise payment may be refused; also pay attention to the issuing bank's creditworthiness, soft clauses, and validity period. Compared with T/T (Telegraphic Transfer), L/C is safer but more cumbersome and costly; compared with D/P (Documents against Payment), L/C involves the bank's primary payment responsibility, while D/P is only commercial credit. Therefore, customer management L/C is an important tool to balance risk and cost, especially suitable for export business with insufficient trust in the buyer.