Receiving money from abroad.
WHAT THE METHODS ARE, FROM MOST TO LEAST SECURE
Payment in advance Documentary credit Documents against payment Documents against acceptance Open account
WHAT PAYMENT IN ADVANCE MEANS
The buyer pays before shipment.
WHY BUYERS RESIST IT
All the risk is theirs.
WHAT A DOCUMENTARY CREDIT PROVIDES
A bank's commitment to pay against compliant documents.
WHAT IT REQUIRES
Presenting documents exactly as specified.
WHY EXACTLY MATTERS
Banks reject on discrepancies, and rejection means no payment.
WHAT TO DO
Check the credit terms carefully on receipt, before shipping.
WHAT TO CHECK
That you can comply with every requirement That dates are achievable That document requirements are possible
WHAT TO DO ABOUT ANYTHING YOU CANNOT MEET
Request an amendment before shipping.
WHAT DOCUMENTS AGAINST PAYMENT MEANS
Documents released to the buyer only on payment.
WHAT IT DOES NOT GUARANTEE
That the buyer takes the goods.
WHAT OPEN ACCOUNT MEANS
Shipping and invoicing, with payment later.
WHO IT SUITS
Established relationships only.
WHAT TO ESTABLISH BEFORE OFFERING IT
The buyer's reliability, from evidence.
WHAT TO CONSIDER
Credit insurance, where available.
WHAT TO KEEP
Every document, and evidence of repatriation.
