A letter of credit document is dense, formal, and easy to skim past the details that actually matter. Reading it properly, line by line, before shipping is what prevents a discrepancy that delays payment.
Applicant and Beneficiary
The applicant is the buyer who requested the LC; the beneficiary is the seller who gets paid against compliant documents. Confirm your company’s name and address exactly match how they appear on the LC — even minor discrepancies here can trigger a rejection.
Expiry Date and Latest Shipment Date
These are two separate deadlines: the latest shipment date is when goods must ship by, and the expiry date is when documents must be presented by. Missing either invalidates the LC’s payment guarantee, covered in more depth in our letters of credit guide.
Required Documents List
This section specifies exactly which documents must be presented — commercial invoice, packing list, bill of lading, certificate of origin, and any others — and exactly how many originals and copies of each. Presenting the wrong quantity is a common, easily avoidable discrepancy.
Description of Goods
This must match your commercial invoice precisely — not approximately. Banks examine documents strictly on their face, so any deviation in product description between the LC and your invoice is grounds for a discrepancy notice.
Partial Shipments and Transhipment Clauses
Check whether partial shipments or transhipment are explicitly allowed or prohibited — shipping in multiple lots or routing through an intermediate port when the LC prohibits it invalidates compliance regardless of whether the goods themselves arrived correctly.
Reviewing an LC Before You Ship
We review letter of credit terms with clients before shipment to catch issues while there’s still time to fix them. Explore our trade finance advisory or book a discovery call.
This article is general information, not financial or legal advice.
Frequently Asked Questions
What is the difference between an LC’s expiry date and latest shipment date?
The latest shipment date is when goods must ship by; the expiry date is when documents must be presented to the bank by. They are separate deadlines, and missing either invalidates the LC’s payment guarantee.
Why does the goods description on an LC matter so precisely?
Banks examine documents strictly on their face, so the goods description on your commercial invoice must match the LC precisely — any deviation is grounds for a discrepancy notice, even if the actual shipment is correct.
What happens if partial shipment is prohibited but you ship in multiple lots?
It invalidates compliance with the LC regardless of whether the goods themselves arrived correctly, since the LC’s specific terms on partial shipment and transhipment must be followed exactly.