Section 15 付款方式Payment Terms.ppt

Section 15 付款方式Payment Terms I Main Points Payment is rather complex in international trade, what risks should be taken into consideration? What are the payment terms most frequently used in foreign trade? The most generally used modes of payment in international trade are: I. 要点概述Main Points 1. What are the payment terms most frequently used in foreign trade? 1. What are the payment terms most frequently used in foreign trade? There are different terms of payment in foreign trade. a) Cash in advance: Seller’s goods must be special in one way or another; b) Letter of credit: Letters of Credit require total accuracy in conforming to terms, conditions, and documentation. Usually, confirmed irrevocable credit is the inclusion of a second assurance of payment, usually a Bank, prevents unexpected problems, and adds assurance that issuing bank has been deemed acceptable by confirming bank; Unconfirmed irrevocable credit means credit can be changed only by mutual agreement, as stipulated in a sales agreement; e) Sight draft: A draft payable upon presentation; f) Time draft: a draft payable within a specified number of days after it is presented; g) Open account Therefore, payment is rather complex in international trade and risks should be taken into consideration. 2. What are the payment discounts in payment? In foreign trade, the most common types of discounts and allowances are: a) Cash discounts for prompt payment: These are intended to speed payment and thereby provide liquidity to the firm and they are sometimes used as a promotional device; b) Quantity discounts: These are price reductions given for large purchases; c) Trade discounts: these are also called functional discounts, payments to distribution channel members for performing some function; d) Partial payment discounts: it is very similar to the trade discount, used when the seller wishes to improve cash flow or liquidity, but finds that the buyer typically is unable to meet the desired discount de