Methods of Payment/Combining Methods of Payment

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Unit 4.1-Methods of Payment 

Introduction | Cash in Advance | Documentary Collections | Letters of Credit | Open Account | Combining Methods | Summary | Resources | Activities | Assessment

Combining Methods of Payment[edit | edit source]

The important thing to remember about methods of payment is that they are not absolute. They can be combined in many ways to reduce risk for all of the parties involved. For example, should a new customer require custom-made products, but cannot afford 100% prepayment, an exporter could offer 50% prepayment to cover the cost of manufacturing and 25% payment at invoice date and 25% payment 90 days after invoice.

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