Methods of Payment for Imports
1.Advance Money:
The importer may agree to advance money for import of goods. The exporter receives money before shipment of goods. The importer depends upon exporter for dispatch of quality items.
2. Confirmed Letter of Credit:
The exporter can present confirmed letter of credit to his bank. The importer can collect goods after payment of accepting bills of exchange. The importer relies on exporter for dispatch of desired quality goods. There is no risk for exporter about
payment
3. Unconfirmed Letter of Credit:
The exporter can give unconfirmed letter of credit to his bank. The importer can collect after making payment of accepting bills of exchange. The importer depends upon exporter for sending quality items. The exporter relies on importer for making payments.
4. Sight Draft:
The importer pays the amount against sight draft. The banker hands over the documents of title to goods after payment. He can take possession of goods there is risk for importer that he receives quality products because goods cannot be returned after payment.
5.Time Bill:
document of title to goods are given to him. The goods are received and payment is The bank presents time bill to the importer. After acceptance of time bill the on due date of bill. The importer is at risk that goods sent are as per order letter.
6. Open Account:
The exporter goes on exporting goods. The importer pays the amount on due date. The exporter sends bills along with goods. The importer goes on selling goods, The exporter depends upon importer for payment. There is little risk for importer.
7. Consignment:
The importer receives goods for sale on behalf of Dfa Ho exporter. The payment is made after sale of all goods. The exporter relies on importer for payment. The risk of exporter is over when amount is received. The importer is free from all risk.
