Negotiating payment

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FIVE STEPS IN NEGOTIATING PAYMENT Than Quynh Trang – Tran Hai Yen

Transcript of Negotiating payment

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FIVE STEPS IN

NEGOTIATING PAYMENT

Than Quynh Trang – Tran Hai Yen

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INTRODUCTION

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CONTENT

PAYMENT TERMSPAYMENT TERMS

5 STEPS IN NEGOTIATING PAYMENT5 STEPS IN NEGOTIATING PAYMENT

TRANSLATIONTRANSLATION

CONCLUSIONCONCLUSION

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PAYMENT TERMS

The condition under which the seller complete a sale.

Specifie the period allowed to a buyer to pay off the amount due

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METHOD OF PAYMENTIssue of payment :

The word “ Cash”

• Interior = within a country money or credit• Exterior = international trade checks & bank transfer

Trust

STEP1

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METHOD OF PAYMENT

Payment in PRIVATE LIFE :

• Cash on delivery

• Cash with order

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METHOD OF PAYMENT

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OPEN ACCOUNT

Time of payment : as agreed, i.e : 30 days

Goods available to buyer : before payment

Risks to seller : buyer do not pay, delay of foreign exchange

When appropriate : absolute trust, seller has sufficient liquidity in case of delay, high banking fees avoided

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OPEN ACCOUNT

Example:

Inter-Bank transfer ( SWIFT)

Buyer’s Cheque

Banker’s Draft

International Money Orders

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EXPORT CREDIT INSURANCE (ECI)

Gives the exporter conditional assurance that payment will be made if the buyer is unable to pay.

Time of execution : since the contract is signed or from the time the goods are shipped.

Covers : currency inconvertibility, expropriation, changes in impore and export regulations

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EXPORT CREDIT INSURANCE

(ECI)

Types of ECI :

Short-term : payment terms < 2 years

Medium to long-term : >= 2 years

Benefits for seller : security, offer a safe open account

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BANK GUARANTEEA guarantee ensures that the liabilities of a debtor will be

met. In other words, if the debtor fails to settle a debt, the bank will cover it.

Types of guarantee:

Finacial BG :  a bond which is not cancelable and ensures the payment .Perfomance BG :  a commitment of the buyer to pay, ensures by the bank

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LETTER OF CREDIT

A binding document that a buyer can request from his bank in order to guarantee that the payment for goods will be transferred to the seller.

Benefit for seller : a bank guarantees a payment in any case

STEP1

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v

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PREPAYMENT

An importer realizes the payment for the items to be imported in advance prior to the shipment of goods.

Risks to the buyer : non – delivery

Appropriate when : the Importer company is new, Importer's credit status is doubtful, political risks are very high in the importer’s country.

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Letter of credit

Bank guarantee

Export Credit Insurance

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Time of paymentThe date on which a declared stocks is scheduled to be paid Depends on the method of payment : before – on (POD) – after delivery

TIMING

STEP2

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PLACE OF PAYMENT

Payment shall be deemed to have been made only when the contract sum is paid into the seller’s bank account and is at the seller’s full disposal

STEP3

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PLACE OF PAYMENT

STEP3

POINT AT WHICH MONEY DEEMED TO BE PAID

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PLACE OF PAYMENT

STEP3

Article 57. Vienna Sales Convention 1980

(1) If the buyer is not bound to pay the price at any other particular place, he must pay it to the seller

(a) at the seller’s place of business; or

(b) if the payment is to be made against the handing over of the goods or of documents, at the place where the handing over takes place.

(2) The seller must bear any increase in the expenses incidental to payment which is caused by a change in his place of business subsequent to the conclusion of the contract.

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DELAY

STEP4

Payment made after the agreed date of payment

Might be excused during a grace period or by a force majeur

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RESULTS OF DELAY

STEP5

Harm to the exporter

Interest should be compensated to the exporter by the buyer under the terms of the contract

Interest payable is simply added to the outstanding sum

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TRANSLATIONS

Prices in the price list don’t include delivery costs, finish cutting and tax VAT. In case of payments delay we count interests which are specified in the contract. If the customer delays in payments of the previous order or in the prepayment – we can stop or cut the realization of the order or refuse giving out the goods.

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Giá được niêm yết trong bảng giá không bao gồm chi phí giao hàng và thuế VAT. Trong trường hợp chậm thanh toán chúng tôi tính lãi theo như đượcquy định cụ thể trong hợp đồng. Nếu khách hàng chậm trễ trong việc thanh toán các đơn hàng trước hoặc trong việc thanh toán trước, chúng tôi có thể chấm dứt việc thực hiện các đơn đặt hàng hoặc từ chối giao hàng.

Prices in the price list don’t include delivery costs and tax VAT. In case of payments delay we count interests which are specified in the contract. If the customer delays in payments of the previous order or in the prepayment – we can stop or cut the realization of the order or refuse giving out the goods.

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TRANSLATIONS

Delayed Payment

If payment of any sum payable is delayed, the Buyer shall be entitle to receive interest on the amount unpaid during the period of delay. The interest shall be at an annual rate three percentage points above the discount rate of the central bank in the seller’s country

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Chậm thanh toán   Nếu việc thanh toán bất kỳ một khoản tiền phải nộp nào bị chậm trễ, người mua sẽ được hưởng một khoảng lãi suất tính trên số tiền chưa trả trong khoảng thời gian chậm trễ. Lãi suất sẽ có một tỷ lệ hàng năm trên ba phần trăm lãi suất chiết khấu của ngân hàng trung ương tại nước của người bán

Delayed Payment If payment of any sum payable is delayed, the Buyer shall be entitle to receive interest on the amount unpaid during the period of delay. The interest shall be at an annual rate three percentage points above the discount rate of the central bank in the seller’s country

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TRANSLATIONSInterest penalty

An interest penalty shall be paid automatically by the designated payment office, without request from the Contractor, if payment is not made by the due date and the conditions listed in paragraphs (a)(6) through (a)(8) of this clause are met, if applicable. However, when the due date falls on a Saturday, Sunday, or legal holiday when Federal Government offices are closed and Government business is not expected to be conducted, payment may be made on the following business day without incurring a late payment interest penalty

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Phạt lãi suất     Một hình phạt lãi suất phải được cơ quan thanh toán được chỉ định tự động trả mà không có yêu cầu từ các nhà thầu, trong trường hợp việc thanh toán không được thực hiện theo thời hạn và các điều kiện được liệt kê trong các đoạn (a)(6) tới (a)(8) của khoản này được đáp ứng, nếu áp dụng được. Tuy nhiên, khi ngày đáo hạn rơi vào một ngày thứ Bảy, Chủ nhật, hoặc ngày lễ hợp pháp khi cơ quan Chính phủ liên bang đang đóng cửa, và các doanh nghiệp nhà nước không dự định kinh doanh, việc thanh toán có thể được thực hiện vào ngày làm việc tiếp theo mà không bị phạt trả lãi chậm thanh toán.

Interest penalty An interest penalty shall be paid automatically by the designated payment office, without request from the Contractor, if payment is not made by the due date and the conditions listed in paragraphs (a)(6) through (a)(8) of this clause are met, if applicable. However, when the due date falls on a Saturday, Sunday, or legal holiday when Federal Government offices are closed and Government business is not expected to be conducted, payment may be made on the following business day without incurring a late payment interest penalty

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TRANSLATIONS

Payment shall be made by an irrevocable, confirmed, at-sight letter of credit. The buyer shall open the letter of credit on or before 11 september on the terms agreed by the parties and annexed to this contract as appendix. Any discrepancy between the terms agreed by the parties and the letter of credit as issued shall be notified by the seller to the buyer immediately.

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Việc thanh toán phải được thực hiện bằng một thư tín dụng được xác nhận trả tiền ngay không hủy ngang. Người bán phải mở thư tín dụng trước hoặc vào ngày 11 tháng 9 với những điều khoản thỏa thuận bởi các bên và được dẫn chiếu tới hợp đồng này dưới dạng phụ lục. Bất kì một sự sai khác nào giữa những điều khoản thỏa thuận bởi các bện với thư tin dụng được lập phải được người bán thông báo cho người mua ngay lập tức

Payment shall be made by an irrevocable, confirmed, at-sight letter of credit. The buyer shall open the letter of credit on or before 11 september on the terms agreed by the parties and annexed to this contract as appendix. Any discrepancy between the terms agreed by the parties and the letter of credit as issued shall be notified by the seller to the buyer immediately.

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THANK YOU

FOR YOUR LISTENING