Bank Guarantee
A Bank Guarantee is a promise from a lender, like a bank, that the debtor will pay back their debts.
If the borrower doesn't pay back the loan, the bank will pay it off. This lowers the risk of doing business with other companies, which lets them sign contracts, buy things, or go out into the field.
For example, a supplier can ask for a Bank Guarantee in a contract with a small customer and a big supplier. The bank will pay the supplier if the customer can't.
To access Bank Guarantee in ERPNext, go to:
Home > Accounting > Banking and Payments > Bank Guarantee
1. How to Create a Bank Guarantee
Go to the Bank Guarantee list and click on New.
Select the Type:
Receiving a Bank Guarantee from a Customer
Providing a Bank Guarantee to a Supplier
Enter the Start Date and the Validity in Days.
Link the Bank Guarantee to a Sales Order or Purchase Order.
- The Customer/Supplier and Amount fields will be filled in automatically.
Pick the Bank and Bank Account.
Write down the "Bank Guarantee Number" and the "Beneficiary Name."
Save and Submit.
Once submited, ERPNext allows you to track both:
Bank Guarantees given to Suppliers
Bank Guarantees given by Customers
You can also set up Email Alerts to remind you when things are due.
1.1 Other Options for Bank Guarantee
Margin Money: A percentage of the money you put in the bank as security.
Charges Incurred: The Bank's fees for handling or processing.
Fixed Deposit Number: This is the FD reference number that goes with the Bank Guarantee.
