Methods of Payment

Goods are shipped to the buyer before payment is made

• Advance payment

• Open account

• Bills for collection

• Letters of credit

Payment is received by the exporter before the goods are shipped.

• Bills for collection

• Letters of credit

• Advance payment

• Open account

Sent by the exporter's bank. When the buyer agrees to the conditions, the goods are shipped.

• Advance payment

• Open account

• Bills for collection

• Letters of credit

A guarantee sent by the buyer's bank that shipment will be made once the documentation has been agreed.

• Bills for collection

• Open account

• Advance payment

• Letters of credit

___________ is when the goods are shipped only after payment has been received.

If the buyer's bank guarantees payment, they use ___________.

The riskiest form of payment is __________.

______________ are sent by the exporter's bank.