Global trade is entering another period of uncertainty.

Recent geopolitical developments and supply chain disruptions are forcing many companies to reconsider how they secure cross-border transactions. As reported by Treasury Today, treasury teams are increasingly turning back to Letter of Credit (LC)-backed trade deals to protect working capital and ensure payment certainty when trade routes and supply chains become unstable.

For several years, many corporates shifted toward open-account trading relationships built on trust between buyers and suppliers. But when volatility rises, companies tend to return to instruments that transfer risk to the banking system.

Letters of Credit provide exactly that safeguard.

The challenge for treasury teams is that while the instrument itself is well understood, the operational processes around it remain surprisingly manual.

What Are Letters of Credit?

In stable markets, buyers and suppliers often operate on open account terms. Goods are shipped, invoices are issued, and payment follows under agreed credit terms.

But uncertainty changes the equation.

Letters of Credit act as bank-backed guarantees that payment will be made once contractual conditions are satisfied. This provides security for both parties in situations such as:

• trading with new or unfamiliar suppliers
• operating in regions with geopolitical risk
• purchasing large shipments of commodities or equipment
• protecting the cash conversion cycle during supply chain disruptions

As uncertainty increases, treasury teams naturally move toward instruments that reduce counterparty risk and protect liquidity.

The Operational Gap Treasury Teams Still Face

While Letters of Credit provide security for trade transactions, the operational process behind them often sits outside the treasury system.

Many organizations still rely on a combination of spreadsheets, bank correspondence, and email approvals to manage their LC portfolio.

That creates several challenges:

• Facility utilization is tracked manually across banks
• Amendments and drawings require offline reconciliation
• Fee invoices are difficult to validate against original terms
• Contingent liabilities are assembled manually during reporting cycles
• Audit trails are scattered across multiple documents

For treasury teams managing dozens or hundreds of LCs, this quickly becomes a significant operational burden.

Bringing Letters of Credit into the Treasury Platform

Ripple Treasury, powered by GTreasury, addresses this challenge by bringing the entire financial lifecycle of Letters of Credit into the treasury system.

Instead of managing LCs across disconnected spreadsheets and manual processes, treasury teams can track issuance, amendments, drawings, and fee accruals directly within the platform.

This creates a unified financial view that connects:

• facility utilization and available headroom
• accounting events and financial postings
• contingent liability reporting
• audit and compliance documentation

The result is that Letters of Credit become part of the same treasury workflow as liquidity, risk management, and cash forecasting, rather than a separate operational process.

What This Looks Like in Practice

To understand the operational impact, consider a few common treasury scenarios.

Managing multi-bank LC facilities

A global manufacturing company maintains several LC facilities across relationship banks to support international suppliers.

Without system integration, treasury teams often track facility headroom manually across multiple spreadsheets.

With Ripple Treasury, all LCs across banks are consolidated into a real-time facility utilization view, allowing treasurers to immediately see available capacity before issuing a new LC.

Handling partial drawings and amendments

A supplier draws a portion of an LC after a shipment dispute.

That single event affects several financial elements simultaneously:

• remaining LC exposure
• facility utilization
• accounting treatment
• fee calculations

Ripple Treasury captures the event once and automatically updates the financial position across the entire portfolio.

Reconciling bank fee invoices

Banks charge issuance, commitment, and amendment fees that are often difficult to reconcile against agreed terms.

Ripple Treasury automatically accrues expected LC fees based on the contractual schedule, allowing treasury teams to immediately identify discrepancies when invoices arrive.

Responding to audit requests

Auditors frequently ask treasury teams to reproduce the exact LC portfolio position at a previous reporting date.

When LCs are managed manually, this can require reconstructing historical spreadsheets and email approvals.

Ripple Treasury provides point-in-time reporting, allowing teams to recreate the portfolio position instantly.

A Traditional Instrument Meets Modern Treasury Operations

Letters of Credit have been supporting international trade for many years. What has changed is the speed and scale of modern treasury operations.

As global trade becomes more volatile, companies are once again relying on instruments that provide financial certainty.

But those instruments must now operate within modern treasury systems designed for visibility, automation, and control.

By integrating the lifecycle of Letters of Credit directly into the treasury platform, Ripple Treasury allows organizations to strengthen trade security without increasing operational complexity.

For treasury leaders navigating an uncertain global trade environment, that capability is becoming increasingly important.

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