If you are an exporter, you need to search for the right balance between getting fast and full payments. Moreover, you must find the best payment systems that will meet the needs of your client. And this means checking out the different global payment systems that can help mitigate the risks related to exportation and giving your clients enough legroom. Payment Systems That Exporters Can Use Cash-in-advance - This is the best payment option for exporters since it eliminates the risks hat they must shoulder. Payments will be remitted before the goods are delivered to the buyer. But most buyers don't want this option since it puts them at a disadvantage, most especially when it comes to cash flow. Aside from that, most buyers avoid this options since there is a risk that their chosen exporter might not be able to deliver their orders after payment has been sent. If you want to use this option, know that you may lose lots of customers. Documentary Collections - The bank will shoulder the task of collecting payment instead of the exporter doing so. The exporter, on the other hand, will collect the payment from the bank of the importer. The payment will then be remitted to the exporter's bank by the importer's bank through an exchange of documents. If you want to use documentary collections, the buyer can pay at a specific date or upon sight of the document. Open Account - When using this payment system, the orders of the buyer will be shipped before the payment's due date. For importers, this option can be advantageous since it can help them efficiently manage their cash flow. On the contrary, this can be disadvantageous for exporters like you. Oftentimes, this is used on hotly contested markets since an open account allows exporters to attract more customers. Letters Of Credit - This is one of the most popular payment systems that can benefit importers and exporters. If you want to use this option, the bank will make a commitment to pay in behalf of the buyer - provided though that the specified terms and conditions are met. The buyer must pay the bank for this service. Basically, letters of credit are utilized if there is only little information about the buyer but the exporter is contented with the reputation of the buyer's bank. If you are exporter, you certainly have several global payment systems to choose from. Be sure to choose one that works to your great advantage.
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