Making payments and getting paid on overseas transactions

An insider’s guide

Everyone doing deals overseas knows how vital it is to collect payments. The same goes for making timely payments to overseas suppliers. There is a catalog of secrets on international trade finance that only those in the trenches know about — such as how a letter of credit can boost profitability for your business. Here, I curate several articles I have authored over the years on overseas transactions. Refer to them as often as you like and on an as-needed basis.

Sending payments to foreign suppliers

In this article, I examine factors to consider when choosing a payment method and I provide some options for how to send payments to foreign suppliers with minimal risk.

Getting paid on international deals

Overseas Transactions Cash

Collecting money from your overseas customers doesn’t have to be painful. The first rule of thumb: Never sell on open account — no ands, ifs or buts! Got it? Open account means you ship goods or sell services without any guarantee of collecting payment on a transaction. Here I provide seven ways to get paid on international deals.

Collecting payments

How do you discover red flags with customers? In other words, when is a customer not a customer? Should PayPal be used to collect overseas payments? This article covers those questions and more.

Minimize your risks

This article outlines several strategies for getting paid in full and on time while minimizing risks.

Using a letter of credit

Short of asking for payment in advance, securing payment with a letter of credit (L/C) is the next best option. Sure it’s a little more expensive — typically one eighth of one percent of the total transaction price plus incidental fees related to any amendments that might have to be made — but it’s worth it to know you have a secure method of payment.

As we all can agree, there’s no price tag for peace of mind. In this article, I cover how an L/C works, the L/C process and the most commonly used letter of credits.

Fund global growth

Overseas Transactions Planning

This article is for growth-minded business owners. Whether your company is exporting, in need of working capital, or seeking a line of credit, these five funding alternatives — from Ex-Im Bank of the United States to the U.S. Small Business Administration’s Export Express loans — will help you land overseas business, expand profitably, and minimize risks.

International transactions

Whether you are collecting payment on a business transaction from a customer across the street or a client who is 12,000 miles away, learning how to collect payment on an overseas transaction is the single most critical, yet insanely overlooked, detail for small- to medium-sized business owners who aspire to do business internationally. Why? Find out here.

Selling abroad profitably

In chapter 20, “Getting Paid,” I devote 31 pages to collecting payment from overseas customers on export sales. Start on page 375 and take it all the way to the end at page 406 to learn everything you need to know about getting paid via traditional export sales or eCommerce.

Escrow

Ready to export your goods and get on with overseas transactions? Don’t want the hassle of a letter of credit, but want your cash upfront? Perhaps an escrow service is the answer. In this article, I examine what an escrow service is, how is it used in international trade and where can you turn for help on using an escrow service.

What is countertrade?

Countertrade is an alternative means to structuring an international sale when conventional means of payment are impossible, complex or nonexistent. In this article, I focus on the most common form of countertrade, bartering — why it is used, which company has put it to use, and what the pros and cons are.

Source, produce and finance

Got a customer overseas who has asked you to export 25,000 (insert your product ______________________)? Fantastic. This article shows you how.

Start reading

Now you have all the finance knowledge you need in one place so you can minimize your risks and be confident on how you handle overseas transactions. One last little detail — don’t forget to consult with your banker. You want to leave no stone unturned on your best course of action.

Image by: Clay Banks on Unsplash