Exporter’s risk is increase right to left. In first days of trade, its suggested to move with Letter of Credit.(Check 8.1.3)
Cash in Advance/Prepayment occurs when a buyer sends payment in the agreed currency and through agreed method to a seller before the product is manufactured and/or shipped.
Open account is typically used between established and trusted traders. As agreed between a buyer and seller, net 30,60, 90 day terms, etc.,
Cash Against Goods (Consignment)
Cash Against Goods. Cash Against Goods is the form of payment made after the arrival of the goods their destination and delivered to the importer.
Documentary Collections D/C (Cash Against Documents)
Its purpose is for the vendor to get the amount owed by a customer from a bank against delivery of documents (invoices, bill of lading…etc.).
Letter of Credit
A letter of credit is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount.
Synthetic Letter of Credir
Irrevocable Letter of Credit (ILOC)
Bank-To–Back Letters of Credit
Confirmed Letter of Credit
Standby Letter of Credit (SLOC)
Credit cards, telepraghic transfer,etc. are several payment terms.