Payment Terms

• The most common payment terms, in order of risk, are:
  • Payment In Advance (least risky)
  • Letter Of Credit
  • Documentary Collection Against Payment
  • Open Account
  • Minimum Guarantee
  • Consignment (most risky)

• Which payment terms you decide to offer to a customer depend on:
  • Political Climate
  • Economic Stability
  • Legal System
  • Competition
  • Customer creditworthiness
  • Your financial resources

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© 2004 John Michael Pierobon

Notes