Pulses Export Settlement Management Of Yihai Company

Export enterprise will face more risk in international trade settlement with the enlargement of it's export business. So it's very important for all export enterprises to learn exactly the international settlement and it's relative risk, then concern how to control the risk correctly.Firstly this article will introduce three common payment patterns in international trade—that is Letter of Credit, Collection and Remittance, include three patterns'concept, feature and riskThen will introduce Yihai's export business, that is pulses export, mainly to Italy, Germany, France, Greece of Europe, India, Pakistan of Asia etc. The feature of pulses export include low invoice value of each business, high export times, low profit, frequent customer, broker as the most among them.Based on above features, collection is the common settlement for normal business, and 10% advance payment plus collection always selected by customers from India, Pakistan of Asia. And some customer select remittance if quantity is less and invoice value not high. Letter of Credit seldom used due to low invoice value for single business.For settlement management and risk control, Yihai account department consider all above payment pattern as open account, manage and control risk by open account application submit. Account Department limits every customer's quota of open account and payment time, will chase customer once they fail payment within payment time. But chasing customer oftenly will destroy the relation between Yihai company and customer. Also too strict open account quota and payment time limitation reflect shipment, because once customer fail payment within time, account department will require trader to postpone, even delete shipment, which cause contradiction between company and customer. But open account is different from collection and remittance, keeping open account management in the wrong perspective and stopping shipment will violate contract and worsen the relation with customer, influence business increase.So it's not suitable to consider all payment pattern as open account and manage it by open account, It's better to strengthen trader management, control risk by other way, such as export credit insurance, customer credit investigation, quality control, prompt shipment and grasp market trend. Above are important for international settlement management.