tailieunhanh - Methods of Payment in International Trade

This guide explains the different methods of getting paid and the different levels of risks involved. You should note that none of the methods outlined below will completely eliminate the payment risks associated with international trade, so you should consider your preferred payment option with care and hedge the risks along with appropriate credit insurance and credit checks on your customers. | SITPRO International Trade Guides Financial Methods of Payment in International Trade Methods of Payment in International Trade Th i s guide explains the different methods of getting paid and the different levels of risks involved. Yo u should note that none of the methods outlined below will completely eliminate the payment risks associated with international trade so you should consider your preferred payment option with care and hedge the risks along with appropriate credit insurance and credit checks on your customers. You should read it if you trade internationally and want to know what your options are in making and receiving international payments. You may wish to pass on the information in this Briefing to your colleagues in the Sales Marketing team and your Finance Director so that they are aware of these issues. Introduction Getting paid for providing goods or services is critical for any business. However getting paid for an international transaction also commonly known as export receivables can be a very different experience from securing payment on business with other UK entities due to the number of extra factors that can influence the process. The main factor in considering how an exporter expects to be paid for a transaction is the potential risk that they and their customer are willing to face between them - don t forget there are always two sides to any situation. There are different types of risk that you will face as an exporter this briefing will consider the payment risk. Payment Risk Ladder It is often a good idea during or even before contract negotiations to consider where on the diagram below you and your customer will be comfortable in placing yourselves. Exporter Least Secure Most Secure Open Account Bills for Collection Letters of Credit Advance Payments Importer Most Secure Least Secure SITPRO Financial Guide Methods of Payment in International Trade Open Account Th is is the least secure method of trading for the exporter but the most