This type of payment, which is quite common, has an opposite nature to “cash in advance”, as it is very favorable for the buyer and unfavorable for the seller (who bears the full payment risks). Under open account payment terms, the supplier ships the goods to the buyer without receiving upfront payments and collects the due amounts at a later date (15, 30, 60, 90 days or more).ĭiscounts on the invoice face value may be granted, on the sale invoice, for anticipated payments. T/T payments expose the buyer to high risks.Īlternative payment risks, described below, have been introduced to minimize the payment risks for buyers (and suppliers) in international trading operations. What is “TT Payment”?Ī bank transfer, otherwise called telegraphic transfer or telex transfer (“T/T”) is the electronic transfer of funds from a buyer/importer to a seller/exporter, via a bank or a similar institution.įor most countries and banks, as a buyer confirms a wire transfer, the funds cannot be recovered from the beneficiary (such payments are irrevocable). In the project materials industry, cash in advance payment terms are rather rare and may occur for stock and fast-track deliveries only.
Payments are made by wire transfer or by company checks (in the US). Indeed, Seller ships the goods to the buyer only after receiving the full (or partial) payment for the goods (upfront payment). CASH IN ADVANCE (CA)Ĭash in advance is one of the most secure payment terms for sellers, and the least secure for buyers. The most common payment terms for contracts are “open account” (the seller delivers without any guarantee, and expects the payment at a later stage), “documentary collections” (the exchange of the documents representative of the goods and the payment are managed via banks), “letters of credit”, “cash in advance”.
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