PAYMENT TERMS AND MINIMIZING THE RISK OF COLLECTION

Training Objective: 

Probably the biggest risk of trade is the collection risk. The risk perception of entrepreneur grows as the distance increase. However, considering the payment and collection practises in Foreign Trade, many methods have been developed to prevent the above mentioned concerns from adversely affecting the trade. In fact, these methods seem to be safer compared to the methods used in domestic trade.

The training program aims to teach the participants what kind of methods can be used to guarantee the payments of the products sold and how their applications will be implemented.

Target Audience:

Export sales, import and export responsibilities of the companies and bank employees.

Duration:

2 day (09.30 – 16.30)

Content:

Cash In Advance Payment Term

  1. Cash in Advance method
  2. Cash in Advance payment  operational steps
  3. Risks of parties and measures

Cash Against Goods Payment Term

  1. Cash Against Goods method
  2. Cash Against Goods operational steps
  3. Risks of parties and measures

Acceptance Credit Payment Term

  1. Acceptance Credit method
  2. Acceptance Credit operational steps
  3. Risks of parties and measures

Cash Against Documents Payment Term

  1. Cash Against Documents method
  2. Cash Against Documents operational steps
  3. Risks of parties and measures

Letter of Credit Payment Term

  1. Letter of Credit method and definitions
  2. Parties in Letter of Credit
  3. Applicant, Issuing Bank, Advicing Bank, Beneficiary and their functions
  4. Process of Letter of Credit
  5. Preparation process, process steps and points to consider
  6. Operation process, process steps and points to consider
  7. Comparison of letter of credit with other terms of payment in terms of buyer and seller interests
  8. Comparison of letter of credit payment method with other collection risk minimization methods in terms of buyer and seller interest
  9. Basic documents used in foreign trade and their importance by letter of credit
  10. Overview of the Ucp 600
  11. International standard banking practice Overview of ISBP 745
  12. Letter of Credit Reading
  13. Examination of Letter Credit drafts
  14. Amendments to letter of credit
  15. Types of Letter of Credit
  16. Case Study: Examination of a sample Letter of Credit
  17. Case Study: Issuing export documents in accordance with Letter of Credit

Minimizing The Risk of Collection

  1. Analyzation of collection risks
  2. Measures to be taken by the buyer against collection risks
  3. Measures to be taken with Acceptance Credit method
  4. Measures to be taken with Letter of Credit method
  5. Measures to be taken with  Letter of Guarantee method
  6. Measures to be taken by the buyer against collection risks
  7. Measures to be taken with Credit Insurance method
  8. Alternative financing methods in foreign trade
  9. Factoring applications in foreign trade
  10. Forfaiting practices in foreign trade