Importing Terms of Payment

A supplier will always want terms of payment which are most favourable for them, such as a payment with the order. An importer would like payment terms that enable him to make payments after has sold and secured payment from his customers, ie he would like credit terms such as payment not due for 30, 60, 90, 180 or 360 days from the date of invoice.

It is even more attractive to the importer if he is able to have goods on consignment, ie he doesn’t pay the suppliers until he has sold the goods to his customers.
Many art galleries take goods from artists and craftsmen only on a consignment sale or return basis. Provided the supplier and the importer agree on the maximum length of time the art gallery can hold the goods on display, eg a work of art, before it is returned to the artists, this is not an unreasonable way of doing business. The artist has his work on display free of charge and gets paid when it is sold or returned to him if it is not sold.
There are many different forms of payment in the international trade and anyone intending to become an importer should make themselves familiar with the main types and the terms used to describe them. All the major clearing banks provide free booklets on terms of payment and a copy should be obtained from your local clearing branch or the international trade section of the bank. In any case, contract should be established with the international section of staff as sooner or later it will be necessary to discuss with them the various possible forms of payment and any currency exchange problems that may arise and how to manage them.

The growing use of the internet to source goods and services means that reasonably assured methods of payment such as credit card payments will be required by the suppliers for purchases via the internet. Buyers should ensure they can recover their payment in the event of non-delivery or delivery of incorrect or damaged goods.