Export LC — Advising Fee Income
Earning an advising fee for notifying the beneficiary (exporter) that a foreign bank has issued an LC in their favor.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash / Exporter Account (Fee Deducted) | Asset/Liability (−) | 150.00 | - |
| LC Advising Fee Income | Revenue (+) | - | 150.00 |
💡 Accountant's Note
Advising an LC means notifying the beneficiary of its existence. The advising bank has no payment obligation — it only verifies the LC's apparent authenticity. The fee is earned at the point of advising (IFRS 15 point-in-time performance obligation).
Practitioner & Systems Framework
💻 ERP Architecture
In Oracle FLEXCUBE BC, the advising bank role is configured as a separate entity from the issuing bank. In SAP TRM-TF, the incoming LC (MT700) triggers the advising workflow and fee charging. SWIFT MT710 is used to re-advise an LC through another bank.
⚠️ Audit Flags
Auditors verify advising fees are charged only when the LC is actually advised (SWIFT MT710 or direct advice to beneficiary). UCP 600 Article 9 governs the advising bank's obligations. If the advising bank adds its confirmation, a higher confirmation fee is charged separately.
📄 Required Documentation
Incoming SWIFT MT700, outgoing advice to exporter, fee billing confirmation, and SWIFT message log.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.