When competing to win export contracts, the payment terms that you offer an overseas buyer can really make a difference.
The payment terms that you can choose from are:
- prepayment where you receive some or all of the payment amount upfront
- documentary collection which involves you shipping your goods or services but retaining control of them until you receive payment or a legal undertaking of future payment from your overseas buyer
- open account (or open credit) which gives your buyer certain credit terms by delivering your goods or services with an invoice requesting payment on a specific date after delivery.
Your bank will be able to provide more comprehensive advice about choosing the right payment option for you.