How to Avoid Letter of Credit Discrepancies: 3 Checks Before You Present

A discrepancy is any mismatch between your documents and the credit, or between the documents themselves — and it gives the issuing bank the right to refuse payment. Here are the three highest-frequency discrepancy types and how to check for them systematically before presentation.

Last updated: 2026-08-10 · English

A discrepancy is any inconsistency between the documents you present and the terms of the letter of credit, or between the documents themselves — a misspelled consignee, a currency that does not match, a quantity off by one carton. Under UCP 600 the issuing bank examines documents on their face against the credit, and a single discrepancy is enough grounds to refuse payment. Avoiding discrepancies is therefore not about arguing well after the fact; it is about a disciplined self-check before presentation. Three checks catch the majority of them: cross-document consistency, Incoterms coherence, and freight-term alignment.

This article is the method — three checks plus a risk grading. If you are new to export documentation and want to see the concrete traps first, start with 3 Trade Document Mistakes That Cost Exporters Their Payment, then come back here.

Check 1: Cross-document consistency

The commercial invoice, packing list and bill of lading must corroborate one another on amount, goods description, quantity, shipper and consignee. Banks apply strict compliance: a description that reads "cotton T-shirts" on the invoice and "T-shirts, cotton" on the bill of lading may pass, but "100% cotton T-shirt" versus "cotton blend T-shirt" will not. How to check: lay the key fields of all three documents side by side and compare them line by line rather than reading each document in isolation.

Note the asymmetry in how the credit treats descriptions. The goods description on the commercial invoice must correspond with the description in the credit; on the other documents a general description not in conflict with the credit is acceptable. Many beneficiaries over-correct here and introduce a new mismatch while trying to fix an imagined one.

Check 2: Incoterms coherence with the documents

The trade term decides who carries freight, insurance and risk. If the contract says FOB — freight payable by the buyer — but the invoice folds ocean freight into the total price, or the bill of lading is marked "freight prepaid", the document set contradicts itself on its face. That is visible to the buyer and to the bank without any investigation. How to check: treat the Incoterms rule in the contract or proforma invoice as the single reference, then verify the invoice, the bill of lading and the freight bill against it — not against each other.

Check 3: Freight terms and charge allocation

Under FOB the buyer bears main-carriage freight, yet in practice the seller often advances local charges — booking fees, terminal handling, documentation — on the buyer's behalf. If those advances are not separated on the document, reconciliation later becomes guesswork and an entirely legitimate charge can look like an inconsistency. How to check: verify freight responsibility, the Incoterms rule and cross-document consistency against one another as a set.

Grading the findings: not every mismatch is equally serious

When you self-check, sort what you find into two tiers. Panic at every prompt and you will re-issue documents you did not need to; treat everything as noise and you will present a discrepant set.

• HighHard discrepancy (direct refusal risk): a genuine contradiction between documents, or between a document and the credit — amount mismatch, description mismatch, currency mismatch, a missing required document, a self-contradictory trade term, or a soft clause that puts control in the applicant's hands. A bank may refuse on strict compliance. Amend or re-issue.
• Needs reviewItem to confirm (no direct refusal, but you decide): values that differ but may both be correct — two currencies pending conversion, different units of measure (pcs versus cartons), an amount that differs because the trade terms differ (CIF includes insurance, FOB does not), or a low-confidence character read from a scanned document. These are not errors; they are questions about whether two things are the same thing.

A checking tool should mirror that grading. Where a contradiction is provable, say so plainly and point at it. Where the basis is uncertain, drop the finding to "needs human review" rather than declaring the document set defective. The user should be able to see at a glance what must be amended and what merely needs confirming.

Choosing a tool: checking is not the same as drafting

Many trade-document products help you produce documents; far fewer help you find out whether the documents you already have agree with each other. Among the ones that do check, there are two designs. One hands the whole document set to a model and returns a sentence — "checked, no issues found" — with no way to ask which rule was applied. The other splits the work: AI only reads the characters, turning PDFs and scans into fields, and fixed rules make the judgement. The second design gives you three things the first cannot: the same input produces the same result today and tomorrow; every finding names the document, the line and the rule behind it; and the output is a suspected inconsistency for you to confirm, not a verdict.