Bank Guarantee

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Overview

Bank Guarantee – Business Overview

The Bank Guarantee document is used to formally record and manage guarantees issued by a bank on behalf of your organization. In business operations, a bank guarantee acts as a financial assurance to a third party (such as a customer, supplier, or government authority) that your organization will meet its contractual obligations. If those obligations are not met, the bank commits to pay the guaranteed amount.

In Dafater, the Bank Guarantee document helps businesses track these commitments clearly, ensuring financial discipline, compliance, and transparency.

Purpose in Business Operations

The Bank Guarantee document is used to: - Record guarantees issued by banks for contracts, tenders, or regulatory requirements
- Track the value, validity period, and beneficiary of each guarantee
- Monitor active, expired, released, or invoked guarantees
- Support financial reporting and risk management

It acts as a centralized reference for all bank-backed commitments made by the business.

Prerequisites and Setup Requirements

Before using the Bank Guarantee document effectively, businesses should ensure: - Banks and financial institutions are already set up in Dafater
- Customers, suppliers, or authorities who will receive the guarantee are properly recorded
- Clear internal policies exist for when and why bank guarantees are required
- Authorized users are defined to create and approve bank guarantees

This preparation ensures consistency and control when guarantees are issued.

Typical Workflow and Business Fit

A common business workflow for a Bank Guarantee is:

  1. Business Requirement Identified
    A contract, tender, or regulation requires a bank guarantee.

  2. Guarantee Requested from Bank
    The organization arranges the guarantee with its bank.

  3. Bank Guarantee Recorded
    Details such as guarantee amount, bank, beneficiary, purpose, and validity dates are recorded in the Bank Guarantee document.

  4. Monitoring Period
    The guarantee remains active while the contract or obligation is in force. Users track expiry dates and conditions.

  5. Closure or Release
    Once obligations are fulfilled, the guarantee is marked as released or expired.

This workflow ensures guarantees are not forgotten, overextended, or misused.

Key Business Scenarios Where It Is Essential

The Bank Guarantee document is especially important in:

In these scenarios, accurate tracking protects both cash flow and reputation.

Important Considerations for Users

When working with the Bank Guarantee document, users should: - Monitor expiry dates closely to avoid unintentional lapses or penalties
- Ensure guarantee amounts match contractual obligations
- Track guarantees that are invoked, released, or renewed
- Avoid overlapping or duplicate guarantees for the same obligation
- Use the document as part of regular financial and risk reviews

Proper management of Bank Guarantee records helps businesses maintain strong financial control and professional credibility.

In summary, the Bank Guarantee document in Dafater is a vital business tool for managing financial assurances, reducing risk, and ensuring contractual compliance across critical operations.

Basic Information

Fields

Field Name Label Type Required Options Description
bg_type Bank Guarantee Type Select ✓ , Receiving, Providing Specifies whether the guarantee is received or provided in Dafater.
reference_doctype Reference Document Type Link DocType Defines the Dafater document type linked to this bank guarantee.
reference_docname Reference Document Name Dynamic Link reference_doctype Identifies the specific Dafater document linked as reference.
customer Customer Link Customer Customer associated with the bank guarantee in Dafater.
supplier Supplier Link Supplier Supplier involved for the bank guarantee, if applicable.
project Project Link Project Related project under which the bank guarantee is issued.
amount Amount Currency ✓ - Total guaranteed amount covered under the bank guarantee.
start_date Start Date Date ✓ - Date from which the bank guarantee becomes effective.
validity Validity in Days Int - Number of days the bank guarantee remains valid.
end_date End Date Date - Date on which the bank guarantee expires.
bank Bank Link Bank Bank issuing or receiving the guarantee in Dafater.
bank_account Bank Account Link Bank Account Linked bank account used for the bank guarantee.
account Account Link Account Accounting ledger associated with the bank guarantee entry.
bankaccountno Bank Account No Data - Bank account number related to the guarantee.
iban IBAN Data - International Bank Account Number for the linked bank account.
branch_code Branch Code Data - Bank branch identification code for the guarantee.
swift_number SWIFT number Data - SWIFT code used for international bank communication.
more_information Clauses and Conditions Text Editor - Detailed clauses, terms, and conditions of the bank guarantee.
bankguaranteenumber Bank Guarantee Number Data - Unique reference number assigned by the issuing bank.
nameofbeneficiary Name of Beneficiary Data - Beneficiary name in whose favor the guarantee is issued.
margin_money Margin Money Currency - Margin amount blocked against the bank guarantee.
charges Charges Incurred Currency - Total bank charges incurred for issuing the guarantee.
fixeddepositnumber Fixed Deposit Number Data - Fixed deposit reference linked as collateral for guarantee.
amended_from Amended From Link Bank Guarantee Original bank guarantee reference from which this was amended.

Permissions

Role Read Write Create Delete Submit Cancel
Accounts User ✓ ✓ ✓ ✓
Accounts Manager ✓ ✓ ✓ ✓ ✓ ✓
DocType Relationship Module
Account Links to Accounts
Bank Links to Accounts
Bank Account Links to Accounts
Bank Guarantee Links to Accounts
Customer Links to Selling
Project Links to Projects
Supplier Links to Buying