What is the safest terms of payment used in exporting?
There are several different methods of payment used by exporters and importers. The safest for the exporter is prepayment, but your buyer is unlikely to agree to such terms. The preferred method when dealing with a new customer involves a documentary letter of credit through the banking system. Other methods include sight and term drafts (documentary collection) and open account. Exporters trading under these terms should consider obtaining export credit insurance against the risk of non-payment. The Chamber of Commerce and Industry of Western Australia conducts training courses on Trade Documentation, Documentary Credits and Getting Paid for your Exports. For further information contact trade@cciwa.
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