Export coffee tea/beans

Global trade, transactions, and purchases have become simple and convenient as a result of the current global trade trend. Buying and selling items is a subject of payment, in addition to the exchange. Both the buyer and the seller must agree on and select a suitable international payment method when making import and export shipments.

The international role of Vietnamese exporters options in payment

• After deciding on a payment method, both buyers and sellers will be aware of the payment deadline.
• Creating general payment regulations, limiting hazards associated with distance from addresses, languages, customs, laws, and commercial practices in each region.
• Ensure that the purchase and sale connection is rigorous.
• When a dispute arises, it serves as the basis for prosecution green coffee beans.

International payment methods exporting at a glance. There are four basic types of payment in import and export:

The essence of accounting is that the exporter export coffee tea will form an account to debit quantities such as money for goods and services delivered to the importer, as well as specify the length of time for payment of fees incurred in cash or by check.

Participants’ roles: Only exporters and importers are allowed to participate. The bank’s role is limited to creating the account and making payments to the exporter as stipulated by the importer from time to time.

The exporter starts an account (opens a book) and the importer does not open a parallel book in the bookkeeping approach. If the book is opened, it has merely monitoring value rather than payment value.

Process of implementation:

• The exporter provides the goods/services and submits the necessary paperwork to the importer.
• The exporter debits the account and informs the importer of the debt.
• The importer pays the exporter on a regular basis (monthly, quarterly, or semi-annually) by transferring money through the bank or paying by check.

When is it appropriate to employ the accounting payment method?

It is more beneficial for the importer to use this approach, which is used when the exporter wants to extend credit to the importer (deferred sales).

Should only be utilized when:

• Both parties have a regular trading relationship with a small volume and mutual confidence.
• Exporters provide their products to importers and distributors in other countries to sell.
• Expenses such as freight, insurance, postage, commissions, escrow fees, loan interest, and return on investment must be paid.

Collection technique – Collection Definition

After sending the items to the imports and exports will also send paperwork to his bank in order to collect money from the importer’s bank. This is a system in which the bank’s responsibility is very clear: it ensures the safety of both international  importers and exporters. Methods – the International Chamber of Commerce’s shortened URC.

Financial and/or commercial paperwork is essential collection documentation

• Financial documents include drafts, promissory notes, checks, and other payment-related documents.
• Commercial documents include invoices, bills of lading, title documents, and other documents that are not pecuniary in nature.
• There are two sorts of collection methods based on the documents sent for collection:
• Only financial documents, not commercial documents, are collected in a clean collection.
• The purpose of the documentary collection is to collect:
• Documents that are both commercial and financial should be attached.
• Financial documents are not included in commercial documents.
• The following parties are involved in the collection method:
• Exporter – trustee for the collection: Remitting bank – principal document transmission bank
• The presenting bank can also be the collecting bank: Getting money from the bank
• Importer-payer or bank of importer’s choice: Drawee
• Implementing the collection method entails the following steps:

 Because of the easy collecting

• The coffee exports delivers goods/provides services to the imported and sends paperwork.
• Prepare drafts and collection requests for payment to the exporter’s bank from the foreign importing bank.
• The bank of the exporter sends the bill of exchange and instructions to the bank of the importer in another nation.
• The collecting bank gives the draft to the drawee in accordance with the collection instructions.
• The bill of exchange is paid or accepted by the drawee.
• The money or accepted draft is transferred from the collecting bank to the transmitting bank.
• Payment is sent to the exporter via bank transfer or approved draft.
• Due to separate reception and payment, this approach is rarely employed because it does not protect the interests of both parties. Only for paying fees or collecting checks between banks.
• The procedure for implementing the document collection method
• The items are delivered to the importer by the exporter.
• Prepare business paperwork, including drafts and collection instructions, and submit them to the exporting party’s bank for collection on behalf of the importer.
• The bank sends the paperwork and collecting instructions to the importing country’s correspondent bank.
• The collecting bank sends documents to the importing party in accordance with collection instructions.
• To release the documents for delivery, the importer pays or pays the bill of exchange.
• The money or accepted draft is transferred from the collecting bank to the transmitting bank (if required, the collecting bank may keep the accepted draft, collect the money when it is due, and then return it). money).
• The money or draft is transferred to the exporter by the bank.

Note: The technique of document collection protects the exporter’s interests because the exporter’s bank controls the word and goods, while the importer who wants the goods must pay money to the first party’s bank.
However, because the exporter must lose time and money to recover funds or settle the sent shipment, this approach still includes dangers.

To pay for document exchange, use the following collection method (D/A): After the bill of exchange is accepted, the exporter loses possession of the goods, and payment is contingent on the importer’s goodwill.

If the products are sent by air or another means of transportation, the air waybill or other similar document is not proof of title for the items, therefore the commodities may be delivered to the importer quickly. when there hasn’t been any payment or acceptance

The procedure of a letter of credit (L/C)
Definition: A letter of credit (L/C) is a document issued by an importing bank that promises to pay the exporter if the exporter submits a complete set of documentation. As a result, this L/C is referred to as a commercial or documentary L/C. The L/C is issued in accordance with the contract’s conditions, but it is wholly separate from the contract.

L/C, L/C, L/C, L/C, L/C

(1) Types of classification (or based on the commitment nature of the open bank)

• Revocable L/C (Revocable L/C) is a type of revocable credit card.
• Irrevocable Letter of Credit (Irrevocable L/C) is a type of letter of credit that cannot be revoked.
• A confirmed Letter of Credit (Confirmed L/C) is a type of letter of credit that has been confirmed.
• L/C that can be transferred
• L/C Back to Back
• A revolving letter of credit is a type of credit that can be used again
• Letter of Credit on Standby
• Reciprocal L/C (Reciprocal L/C) is a type of reciprocal loan.
• The Clause in Red L/C

Main information necessary in the L/C:

• Number, location, and L/C opening date
• L/C type
• Related parties’ names and addresses: L/C requesters, beneficiaries, banks, etc.
• The amount and the currency
• Period of validity, payment terms, and delivery terms
• Terms of delivery: circumstances, delivery location…
• Name, number, weight, packaging, and wrapping of items…
• The beneficiary must produce the following documents: a draft, a commercial invoice, a bill of lading, insurance documents, a C/0, a C/Q…
• The bank’s promise to open the letter of credit
• Other information

The L/C payment method implementation process:

• The exporter uses a foreign trade contract to create a letter of credit (L/C) with his bank for his own gain.
• The importing bank issues the LC (issuing L/C) at the beneficiary’s request and transfers the original L/C to the exporter with the contents for the exporting bank to enjoy (the advising bank).
• The exporter’s representative bank verifies the L/C and returns the original to the exporter.
• The exporter delivers the items to the importer based on the contents of the L/C.
• The exporter completes the documents and submits the draft to the exporting bank to request payment for that set of documents when the items are delivered.
• Payment procedures will be carried out by the notifying bank that has received a satisfactory set of documentation.
• The international payment methods documents are transferred from the advising bank to the bank of the importing party.
• After obtaining the documentation from the Notifying Bank and verifying that the L/C is satisfactory, the importing bank (L/C Issuing Bank) will continue to transfer the funds to the advising bank.
• The importer’s bank notifies the imports that the exporter has been paid and requests that the importer reimburse his or her money before releasing the import documents to complete the import process.

Remittance – Remittance Definition:

This is a procedure in which an importer requests that his bank transfer a specific amount of money to an exporter via an overseas correspondent bank.

The money transfer process involves four partners:

• Remitter – Imports
• Beneficiary – Exports
• Remitting Bank – Importer’s Bank
• Corresponding Bank – Exporter’s Bank

The procedure for sending money is as follows:

• The importer sends a money transfer request (money transfer order) to his service bank, requesting that money be transferred to the foreign exporter.
• The remittance bank instructs its foreign correspondent bank to transfer the funds and issues a debit note to the importing bank.
• The import agency delivers a debit note to the exporting party after depositing money with the exporter.
• The exporter ships the items as soon as payment is received.
• The money belonging to the remitter has the right to revoke the money transfer request before it is repaid, and the payee has no right to protest.

Methods of remittance currently in use:

Telegraphic Transfer Remittance (T/T): the transfer time is quite short, but the remitter must pay a procedural fee as well as the cost of the telegram. Today, this is the most often utilized method.

Mail transfer remittance (M/T): low cost, extended transfer period.

Note: This is a very simple and low-cost form of money transmission (usually only 0.15 percent – 0.2 percent of the transferred amount) pros cons buyer

However, because this payment method is risky for both parties, it should only be used when there is a solid business relationship and the payment amount is small consumption.

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