You and your clients will talk about several topics as you negotiate a reasonable payment terms that will be used as every transaction from then on. They include, but are not limited to:

• Priority of the transaction;
• The relationship with client, new or long-term;
• The destination where the goods will be shipped;
• The individual rules for each country when money is moved around; and
• Whether or not the order will be modified, built to specification, or straight from the source.

The global market is dynamic; companies will expand from routinely analyzing its own client base and measuring political, finance and foreign-exchange risks to see which option is deemed best to fit the criteria. There are plenty of sources that offer background information on individual countries and their economies. A few that are widely known include:

• Small Business Administration;
• Overseas Private Investment Corporation;
• National Association of Credit Managers;
• U.S. Export-Import Bank; and
• U.S. State Department

Payment Terms
It is critical that you understand the potential risk and openness that you will experience if you agree to a payment term with your client. In a couple of cases, the risks are out in the open to both parties; in others, the risk is hidden by certain banking procedures or laws in the buyer's country. Thus, it is high critical to be as detailed as possible in the area of quotations, contracts, and any other type of payment documentation.

The following list will include most payment options that are available to exporters and importers around the world along with a short summary of rewards, costs, and risks:

Open Account
Reward: Low fees for both the buyer and seller; the expenses are limited to wire transfer fees and foreign exchange prices.
Risk: Not receiving payment since the buyer already has the goods beforehand.
Open Account supported by the buyer's bank by issuing a Standby Letter of Credit to replace a Bank Guarantee.
Rewards: Bank issues Letter of Credit and it is prepared to meet the International Standby Practices, International Chamber of Commerce Publication No. 590 (ISP 98) when referenced in the letter of credit.
Costs: Banking fees subtracted from payment; the buyer has to pay for the time of validity of the Standby Letter of Credit.
Risks: Buyer already has goods before payment is made. Delay of payment because of the submission of documentation that complements the letter of credit.

Time draft
Rewards: Buyer guarantees their bank that they will abide by their commitment to send payment before receiving documentation that gives them the choice to claim the goods from the carrier. Bankers usually handle these drafts under strict rules regulated by the International Chamber of Commerce.
Costs: Quite low, about $300 per transaction.
Risks: Buyer still has goods before payment. You have to trust the buyer to complete the transaction.

Sight draft
Rewards: Buyer pays their bank before they receive documentation that lets them claim the goods from the carrier. Bankers usually handle the drafts under the strict rules of ICC Uniform Rules for Collections.
Costs: Usually low, about $300 per transaction.

Letters of Credit
Rewards: Most of the risk is alleviated by a bank promise to send payment under the terms set in the letter of credit. Bankers will always handle letters of credit under the ICC Uniform Customs and Practice for Documentary Credits.
Costs: Depends on the letter of credit. Banks will never do any of the negotiating for the seller. Also, the seller will pay fees to the freight forwarder.

Cash In Advance
Rewards: Payment before shipping the order
Costs: Low
Risks: Possible loss of orders due to competition willing to accept other forms of payment.

Keep in mind, the payment term that is ideal for one company may not work for you; pick the term that does not keep you up at night. A major piece of your assessment will be an analysis of the payment options within your company and the terms the competition is also offering to your audience.

thanks for you tips. payment is the most import key in the business.
we choose payment method should be more carefully~~