Менеджеры и менеджмент (Executives and Management) - 85 стр.

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259
etc. OUT
(you pay the invoice)
Sales
Invoices SEND
OUT
to supplier
payments – cheques,
etc.
RECEIVE from cus-
tomer
(you invoice the cus-
tomer)
Methods of Payment in Foreign Trade
1. CWO – cash with order: Note that cash simply means money in tills context. This method is uncommon
since you extend credit to your supplier; in addition you run the risk that the goods will not be dispatched in
accordance with the contract terms. But this is usual with mail order, where you pay by Eurocheque or cheque
or by using a credit card. In business, CWO contracts often include provision for partial advance payments in
the form of deposits (normally between 10 per cent and 20 per cent of the contract price). Or they include pro-
gress payments at various stages of manufacture (particularly for capital goods). Then the remainder of the
payment is usually made by one of the methods described below.
2. Open account: This is a simple agreement in which you agree to pay for the goods after you have re-
ceived them, usually on a monthly basis. There are various ways in which you can send money to your suppli-
ers under open account. Your suppliers may suggest the method to be used, for example:
Cheque: This is usually the slowest method of payment. Your suppliers may have charges from their own
bank and also from banks in your country since a cheque has to be cleared through the international banking
system before they receive credit. Different banks have different methods and this could take as long as a
month. For these reasons your suppliers may not accept payment by cheque.
Banker's draft: You can arrange for your bank to issue a draft, which is a kind of cheque, drawn on an
overseas bank in either sterling or foreign currency. You send this direct to your suppliers who pay it into their
bank account. Then they will usually receive immediate credit.
Telegraphic Transfer: This is the fastest method of sending money abroad but costs a little more than
most other methods of transferring money. Your bank instructs an overseas bank, by cable or telex, to pay a
stated amount of money to your suppliers. Your own or foreign currency may be sent in tins way. If you wish,
the overseas hank can be instructed to inform your suppliers as soon as the money arrives.
International Payment Order: You can arrange for your hank to instruct an overseas hank to make pay-
ment to your supplier, by airmail. International Payment Orders are slower than Telegraphic Transfers, but they
are slightly cheaper because there are no cable costs.
International Money Orders: These can be purchased from your bank. You post the money order to your
suppliers and they receive immediate credit from their bank in the same way as with a draft. This is a very
cheap and simple way to make payment of relatively small amounts.
3. Documentary Bill of Exchange: This is a popular way of arranging payment and offers benefits for
both you and your suppliers. The main advantage is that you are not required to make payment until you suppli-
ers have dispatched the goods. Your suppliers are protected by law and also know that money owing against
bills of exchange can easily he obtained. It is in effect a demand for payment from your suppliers. They will
draw it up on a specially printed form or on their own headed notepaper and forward it to their bank, together
with the document relating to the transaction. These may include a transport document proving that the goods
have bee dispatched.
The overseas hank will send the hill and documents to a bank in your country for 'collection'. Your bank
will notify you of the arrival of the documents and will pass them on to you provided that:
• if the bill is drawn 'at sight', you pay the amount of the hill in full when it is presented to you;
• if the bill is drawn payable after a certain number of days you 'accept' the bill. It means that you sign
across the bill your agreement to pay the amount full on the due date.
FINANCIAL TERMS
Add the missing words.
1. Banks ... your account: when you use a Eurocheque abroad.

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