Term
| What are the payment methods that suit high-risk customers? (p 177) |
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Definition
-payment on delivery
-irrevocable confirmed letter of credit
-payment in advance |
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Term
| What are the good credit practices? (p 177) |
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Definition
-being aware of any unfavorable changes in payment patterns
-refrain from going beyond terms |
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Term
| How can U.S. Commercial Service International Company Profile (ICP) help you? (p 177) |
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Definition
| provides useful information for credit checks. It gives more info about the company |
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Term
| What are the basic methods of payment? (p 178) |
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Definition
-cash in advance
-documentary letter of credit
-documentary collection or draft
-open account
-other payment mechanisms |
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Term
|
Definition
-relieved of collection problems
-wire transfer is commonly used
-for the buyer, tends to create cash flow problems and increases risk |
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Term
| Documentary letter of credit. (p 179) |
|
Definition
-protects the interest of both buyer and seller
-payment made on presentation of documents
-banks charge fees for handling letters of credit |
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Term
|
Definition
| drafts that are paid on presentation |
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Term
| Time, date draft (p 179, 182) |
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Definition
| drafts to be paid at a later date, ofter after the buyer receives goods |
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Term
| Open account. (p 182-183) |
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Definition
-can be convenient if the buyer is well established
-popular with large firms
-can be risky |
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|
Term
| Letters of credit (p 179) |
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Definition
| -adds a banks promise to that of the buyer to pay the exporter |
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Term
| Irrevocable and Revocable LOC (p 181) |
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Definition
irrevocable - cannot be changed unless both parties agree
revocable - either party may unilaterally make changes (risky) |
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Term
| Drafts or bill of exchange (p 181) |
|
Definition
-analogous to a foreign buyer's check
-carry the risk that they will not be honored |
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Term
| Ocean Bill of Lading(p 182) |
|
Definition
| document that evidences title |
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Term
| International consignment sales (p 183) |
|
Definition
- follow same procedures in the US
- goods are shipped to foreign distributor, who sells on behalf of the exporter |
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Term
|
Definition
-through chamber of commerce
-faster and less costly than legal action |
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Term
| What are the ways to avoid currency exchange risk? (p 183-184) |
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Definition
-require payments in US dollars
-be aware of any problems with currency convertibility |
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Term
| What are the ways to handle payment problems? (p 184-185) |
|
Definition
-negotiate
-assistance of a bank
-arbitration
-legal action |
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