Export trade can not be separated from foreign exchange collection. Recently, Syria, Saudi Arabia, Ethiopia and other countries have foreign exchange collection risks. Please export enterprises and foreign traders are particularly concerned!
There is also a detailed explanation of the risks of international settlement methods and payment methods!
On September 9, the Office of Business in Syria issued an early warning that the Syrian pound had a currency crisis. A number of Syrian economists and officials recommended strict controls on current import demand. On September 11, another Syrian official suggested that the foreign exchange control policy adopted by Syria in the 1980s should be implemented, that is, individuals are not allowed to hold foreign exchange, and foreign exchange exchange can only be exchanged through legal channels.
In August, the Ministry of Commerce also issued a reminder of the risk of collecting foreign exchange from sand export trade. Some domestic export companies encountered Saudi importers 'arrears in payment, and the recovery effect was not good.
In July, the Business Office of the Chinese Embassy in Ethiopia received a number of complaints about the problem of Chinese companies facing arrears in payment by Ethiopian importers. And carried out to the export trade settlement matters of Egypt.
In order to help you avoid the risk of foreign exchange, Xinbao small guard today brought you a variety of foreign trade payment methods of risk detailed solution!
The following payment methods are ranked from low to high risk
Money to production. Note that this is a model to production, this method is not a model to delivery. This method of payment means that the entire purchase price is received before production has begun. Of course, for the exporter, it is a payment method with a risk of 0, but the same method is the greatest risk for the importer. This payment method is usually used only for sample lists or small orders.
T/T Deposit + T / T Payment paid before final shipment
This payment method is also very safe. And the higher the percentage of deposit, the higher the safety factor. Of course, there are some very extreme situations here. After the customer has paid the deposit and abandoned the goods, or closed down, the probability is very, very small. As long as there is no delivery, the deposit received by the customer's abandonment of the case, can be resold to other customers or lower prices.
T/T Deposit + Closing Letter of Credit at sight
In general, it is 30 % T/T and 70 % of the post-payment letters of credit. Of course, the higher the ratio of T/T at this time, the better. In fact, this payment method is almost the same security as the second payment method. It is also a safer payment method.
The difference is that using this payment method, the bill of lading must be shipped on board before the bill of lading can be delivered. The biggest risk of letter of credit collection is the customer's refusal to pay after the point of default. After receiving the T/T deposit, the customer can guarantee that even if there is a discrepancy point, the customer will basically accept the non-conformity point payment redemption form, because he has already paid so much deposit, it is impossible to do not want a deposit for a point of inconsistency on the document. Do not want. So this payment method is also relatively safe.
It should be noted here that the T/T deposit is accepted first, and the irrevocable letter of credit at sight is a very safe payment method.
In one case, a client in Bangladesh made a deposit of 70 % of the amount of the letter of credit, and 30 % of the amount was paid in documents such as T/T. This payment method is very unsafe because the exporter is very embarrassed if the customer does not pay the T/T tail after the goods have been loaded on the ship with a full set of documents. If the goods do not deliver the bill immediately arrived in Hong Kong, there is a demurrage fee. After the delivery of the bill, the customer does not pay the final payment without effective means of restraint. Shortly afterwards, the Bangladeshi customer said that they should pay the bill first, and the T/T part he sold before paying. Such payment methods are risky and need to be avoided.
The above three payment methods can be said to be relatively safe. If you control your risk more strictly, these three ways are, basically, there is no bad debt and no risk of receiving payment.
Part T/T Deposit, Part of the end money can be found in copy of Bill of lading copy
This is the most commonly used payment method. The most peer-to-peer ratio is 30 % T/T, and 70 % of the tail is shown in the copy of the bill of lading. In practice, there will be some changes. For example, for some old customers who have a good payment method, they can also be 20 % T/T, and 80 % of the final payment can be paid in the bill of lading.
This mode of payment is 99 per cent secure and also safer. The following are the risk points of adopting this payment method:
1. Significant changes have taken place in customer business conditions. Unable to pay the final payment. The business situation here has undergone major changes. It may be mainly due to the problem of the capital turnover of the customer company. Foreign bank lending rates are very low, and many customers rely heavily on bank loans for working capital. Some even have no funds at all. After they have orders, they will apply for loans and place them at home. When the financial chain of his funds is broken, there may be a way to pay a partial deposit and be unable to pay the final payment.
In this case, the customer's strength should be investigated before determining the payment method. In all aspects of business conditions, the customer's credit report can be obtained through China Credit Insurance. If the reputation is not very reliable customers, you can use the practice of requiring a higher deposit ratio, such as an increase to 50 % deposit, so that the risk of customer abandonment is greatly reduced.
2. The international environment has undergone sudden changes, such as the sudden collapse of the customer's exchange rate. The exchange rate of Russia and Brazil fell by 30 or 40 points in 15 years. At this time, if some orders customers pay a relatively small percentage of deposits, about 10 % to 20 %, customers may directly abandon the goods, that is, I do not want the deposit, and you do not give me the goods.
In other cases, the impact of the war, such as Ukraine in 14 years, due to the impact of the Crimean conflict, many Ukrainian customers went bankrupt. In such a situation, the abandonment of goods will often happen. In view of this situation, the international environment needs constant attention. When dealing with customer orders in economically volatile areas, you can also reduce the collection risk by increasing the percentage of deposits or requiring payment before shipment.
3. The third situation is worse, or fraud. The above two situations are the risk of abandonment brought about by changes in objective conditions. In many cases, customers do not want to dump their goods subjectively. There are some unscrupulous freight forwarders who will collude with customers to have no documents to release the goods.
4. Another risk is that South American laws provide that if the consignee on a registered Bill of lading is the actual importer, he may take delivery on a copy of the bill of lading. Mainly South American Brazil, Nicaragua, Guatemala, Honduras, El Salvador, Costa Rica, Dominica, Venezuela. In this case, we need to put the consignee of the bill of lading as far as possible to To Order, which means that the consignee is uncertain, on the instructions of the consignor of Shipper. We can endorse the bill of lading after receipt of the full amount, that is, the English article on the back of the bill of lading, and then send a revised copy to the customer.
For part of the T/T deposit, the final payment is paid by the bill of lading. There are several ways to reduce the collection risk:
1. Try to use To Order instead of the actual name of the consignee as the consignee of the bill of lading. To Order means that according to Shipper's instructions, such a bill of lading can only be withdrawn after Shipper's endorsement, increasing the control of the goods. However, one drawback of this is that To Order indicates that the bill of lading can not be charged. If you encounter a customer who needs a bill of lading discharge, you must change the consignee to a customer company before you can discharge.
2. Increase the deposit ratio as much as possible. This role is to reduce the risk of customer abandonment when the economy of the importing country or customer operating conditions change. If he's already paid half the deposit, he won't dump it easily. It is also unlikely that the exchange rate will fall by 50 per cent in a month or two. On the other hand, the advantage of overcharging the deposit is that in case the customer really abandons the goods, the deposit you receive can cover the cost of pulling the goods back and handling the resale. In this way, we should take the initiative in handling abandoned goods.
3. See Bill of lading 5 or 10 days to pay the final payment, this is to give the customer a payment period. Some customers like to drag until the goods arrive in Hong Kong due to cash flow. See Bill of lading 5 or 10 days to pay the final payment, gave him a definite time limit. In this way, if the customer urgently needs to delay the situation, the collection of money is also justified. If not, some customers will think I can pay before I arrive in Hong Kong. Even encountered some malicious delay of the customer, money deliberately do not pay. Because delayed payment will cause us exchange rate losses, it can be used as a basis for claims.
4. Pay close attention to the international situation, to the risk of strict control of payment methods. For example, some exchange rates have fallen sharply, or the political environment is turbulent, there is a risk of war, and so on. In the face of such a customer, before receiving orders, it is particularly necessary to strictly examine the risks posed by the payment method.