Importer accepts price and places order with exporter.
Exporter accepts order.
Exporter examines and approves letter of credit. Exporter ships goods to importer. Exporter's bank sends documents to importer's bank and receives payment from importer's bank. Importer's bank advises importer when goods have arrived and requests full payment from importer. Although the sequence in the above transaction may be somewhat different depending upon the individual order, the basic principles will remain the same.