Goods shipped once payment is received
Our Advance Payments are allowed against a Proforma Invoice and favours the exporter, as the goods are only shipped (or in some cases manufactured) once payment has been received from the buyer (importer). The buyer therefore takes the risk that payment is made and product is not received.
Why you need this
Favours the exporter
This method of payment favours the exporter, as the goods are only shipped (or in some cases manufactured) once payment has been received from the buyer (importer).
The buyer pays the seller before the goods have been shipped, or in some cases before the goods have been manufactured
Payment can be effected by bank draft or electronic payment (SWIFT).
What you need to do
Whether you are importing or exporting
If you are exporting
On conclusion of the contact of sale, the buyer sends you advance payment
Your bank will receive an inward transfer in your favour
You will need to supply your bank with the appropriate settlement instructions, as well as conversion instructions if the transfer is in foreign currency
You ship the goods and forward the documents to the buyer
If you are importing
The contract of sale is concluded
Contact our International Business Centre and request them to do a SWIFT transfer or issue you with a draft
You will need to supply the International Business Centre with details of the beneficiary (including banking details, amount and currency) and a copy of your invoice
On receipt of the goods and documents, you clear the goods
What the risks are
Know what to look out for
The seller's country may impose laws that prevent the shipment from taking place.
Seller might not ship
The seller may not ship the right quality and/or quantity of goods, or he/she may not ship at all.
No advance payments allowed
The buyer's country may not allow advance payments in respect of imported goods.
The buyer's cash flow may not allow for payment to be made.
Minimise the risks
Bank/Status reports can be obtained to ascertain the reliability and integrity of the seller
Country reports are useful in determining the stability of the seller's country
If the seller will be incurring costs to either manufacture or secure the goods from another supplier, reports should be obtained on the buyer and the buyer's country
The buyer may request the seller to issue an Advance Payment Guarantee covering any monies advanced to the seller, should the seller default
When to use this
Manufacture only when paid
When you should use this method of settling an international trade transaction.
This method of payment favours the exporter as he/she only ships or manufactures the goods once payment has been received from the buyer. The buyer, therefore, runs the risk of paying for goods that may never arrive, or not be in accordance with the order.
Getting it made easy
First National Bank of Namibia Limited, Reg. No. 2002/0180.