Terms of Payment, Payment Terms and conditions in Import Export International Business Foreign Trade

There are different types of payment terms and conditions in import export business.

Different types of Terms of Terms of Payment, Payment Terms and conditions are there in export import & international business, but the most common types are :

- TT advance payment terms / 100% advance / TT advance
- CAD / DP (Cash against documents / Delivery against payment)
- DA (Delivery against acceptance)
- Bank Guarantee
- Letter of Credit or LC
- Open account method of payment in international trade / open account payment in international trade

Here, Hyderabad based exporter exported to Khartum, Sudan. Payment terms and conditions that exporter accepted was horrible.

This is a classic case of open account payment terms or open account payment in international trade or open account method of payment in international trade which is one of the Terms of Payment / Payment Terms and conditions.

Open account payment terms definition is very simple. open account payment system works on credit mode & so also known as open account credit terms. In open account payment method, payment is realized on deferred mode.

Now main question is what is open account / what is open account in international trade & how does an open account payment method work ?

In open account payment term the buyer is in advantage, but in open account terms method of payment seller is at risk. open account payment risk is non realization of payment. There are few advantages of open account method of payment to importer but there are many disadvantages of open account payment terms to the exporter & it is this disadvantages of open account method of payment that really may benefit the buyer as to buyer there are many advantages of open account in international trade / advantages of open account payment method for buyer. According to us if we compare open account advantages and disadvantages, open account payment is beneficial to (open account payment method is beneficial to / open account method of payment is beneficial to) buyer it makes us feel one sided & so open account system is preferred by importers more as open account method of payment is suitable to the buyer. open account terms and conditions are sometimes one sided and there is no comparison of it with open account vs letter of credit / open account vs documentary trade, as later both being more stable. Since open account credit terms is favoring to buyer, open account system is preferred by importer more.

So, open account payment system should be adopted if you are importer open account payment meaning just like as if it is made for the benefit of importer.

So, the choice of right Terms of Payment / Payment Terms and conditions is must for success in import export and international business.

Moral of the case is Terms of Payment / Payment Terms and conditions if not paid due attention may turn into fatal. Open account payment terms or open account payment in international trade or open account method of payment in international trade is not a good Terms of Payment, Payment Terms and conditions that any exporter can rely upon in very first export consignment / export transaction. Careful and wise decision of Terms of Payment / Payment Terms and conditions is so much essential need in any foreign trade transaction and exporters dealing with international business / international trade must observe it carefully.

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[saparmar]

Thank you sir, Its really a very informative video rather than others who share only information not real cases like you, its helpful to understand the matter very easily. great plz upload another videos too

[igor]

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