05/09/2026
Export Import Payment Terms: A Buyer and Seller Perspective
When companies trade internationally, one of the most important decisions is how payment will be made.
Common international trade payment methods include:
Advance Payment
Letter of Credit (LC)
D/P β Documents Against Payment
D/A β Documents Against Acceptance
Open Account
Consignment
Each method has different implications for:
β
Payment risk
β
Cash flow
β
Working capital
β
Credit exposure
β
Documentation
β
Buyer-seller trust
For example, advance payment generally gives the exporter stronger payment protection, while open-account terms can provide greater cash-flow flexibility to the importer.
The right payment structure depends on the specific transaction.
I have published a detailed guide explaining these Export Import payment terms and the key factors buyers and sellers should consider.
Which payment method do you think works best for a new international trading relationship?
Understand Export Import payment terms including advance payment, LC, D/P, D/A and open account, with practical guidance on payment risk and cash flow