Guarantee Administration

A guarantee is a legal agreement whereby one person (the guarantor) agrees to guarantee the debts or obligations of another person (the debtor) in the event that the debtor fails to meet their obligations. Essentially, the guarantor gives the creditor additional security that the debt will be paid, even if the debtor is insolvent.

In COSMO Project Manufacturing, guarantees are legal agreements between customers, vendors, and guarantors.

Guarantor Process

The general process of a guarantor is illustrated in the following graphic.

We inquire about guarantees at banks or vendors, for example, special insurance vendors offer guarantees. We usually have a guarantee limit of these guarantee drawers. If everything is fine with the offer, then we accept the guarantee and the cost will arise. At the end of the running period for the guarantee, we will return the guarantee back to the drawer (the bank or any vendor).

Guarantor Holder Process

The general process of a guarantor holder is illustrated in the following graphic.

If we act as a guarantee holder, we usually request the guarantees from our vendors or subcontractors. After validating that everything is correct regarding the contract between the parties, we accept the guarantee and if everything works well at the end of the period, we return it back to the vendor.

If the vendor is not able to fulfill, for example, the contract, then we will claim the guarantee at the guarantor.

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The following table describes a sequence of tasks, with links to the topics that describe them.

To	See
Set up the necessary data for using guarantees.	Setup
Learn about the fields and actions on the Guarantee Card.	Guarantee Card

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