Você está na página 1de 20

Five Steps in Negotiating Payment

OPEN ACCOUNT DOCUMENTARY COLLECTION 3

2
MODE OF PAYMENT

DOCUMENTARY CREDIT
4 ADVANCE PAYMENT

STEP 1

Open Account
pay at specific date in the future take place when importer has strong credit history or well-known to seller without any negotiating instruments only evidence his commitment to pay at the committed time no security (no protection for seller) security (bank guarantees, credit exporters insurance)

Documentary Collections
Sales transaction is settled by banks through an exchange of document Process is governed by set of rules (Uniforms Rules for Collection by International Chamber of commerce)

DOCUMENTS D/P AGAINST PAYMENT

D/A

DOCUMENT AGAINST ACCEPTANT

immediate payment at sight (referred to cash against document)

- credit period (e.g. 30 days sight of document or from date shipment) - accompanied with Draft and Bill of Exchange

Documentary Credit
Bank to bank commitment of payment in favor of an exporter (Beneficiary) guaranteeing that payment will be made against certain document which is found with terms set by buyer (Applicant) Set of rules from ICC (Uniform Custom and Practice (UCP600) - 90% bank use this)

ADVANCE PAYMENT
pay before delivery most secure for exporter but not attractive for importer

STEP 2

TIMING OF PAYMENT

How to solve problems in payment by timing

Non-payment

State clear date of payment response to the kind of the method used in the payment term of the Contract:

E.g : Letter of credit Payment shall be made by means of an irrevocable confirmed letter of the credit. The buyer shall open the letter of credit on or before <DATE OF OPENING OF LETTER OF CREDIT> on the term agreed by partie and annexed to this contract as Appendix<NUMBER>

How to solve problems in payment by timing (cont) Delay Offer discounts to encourage customers who have the cash to pay early and save money
E.g: Cash against invoice a 1% discount if payment is made within 30 days of the date of invoice.

Ways to state time in payment term


Calendar date (Fixed date)
The Buyer will pay not later than on 15th of next month after

receiving payment request of the Seller on the end of month.

Interval times
Payment shall be effected by the Buyer, by M/T( Mail Transfer), within 7 days after receipt from the Seller of the shipping documents.

Causing disputes if not be made clearly Easily to be mistaken

PLACE OF PAYMENT Delayed payment often costs a lot of money for compensation

STEP 3

DIFFICULTIES IN NEGOTIATING The banks are able to make foreign transfers Differences in trade Law and customs between 2 countries Conflicts of interest

POINT OF PAYMENT

When the buyer instructs the bank to pay

When the buyer pays the money into his bank

When the buyers bank transfers funds

When funds reach the sellers bank account

Buyer prefers

Seller prefers

Example
Payment shall be deemed to have been received only when the full amount of the value of the goods and services as invoiced has been credited to the Companys bank account without recourse or the Company has received the full amount in cash.

Vic thanh ton s c coi l hon tt ch khi ton b s tin ng vi gi tr ca hng ha v dch v nh trong ha n c chuyn vo ti khon ngn hng ca cng ty m khng b truy i hoc khi cng ty nhn c ton b bng tin mt.

STEP 4

1 2 3

any payment made after the agreed date of payment Force Majeure

Might be excused during a grace period

In most legal systems: the exporter has a right to be compensated for losses due to late payment

Results of Payment

In fact: depends on the payment agreement negotiated


Step 5

open account, no securities and no agreement on late payment

The exporter tries to exert pressure on the buyer

Contract regulates late payment

The exporter has right to receive interest on the amount unpaid during the period of delay

Agreement to strengthen the payment provisions with a payment guarantee Create a payment regulation which makes late payment impossible

obliges a bank to pay

the confirmed, irrevocable, at-sight letter

of credit

Confirmed, irrevocable, at-sight LC


Irrevocable:
It can be neither amended nor cancelled without the agreement of all the parties to the credit The Issuing bank gives a binding undertaking to the Beneficiary provided all the credit terms and conditions are fulfilled Under UCP 600 all letters of credit are irrevocable

Confirm:
Where a bank usually in the Beneficiary's country, adds its own undertaking confirming that payment will be made as long as compliant documents are presented Confirmation gives the exporter added security, particularly if the standing of the Issuing bank is unknown or the current political and economic state of the importer's country is uncertain

At-sight:
The terms of the letter of credit require immediate payment