The agreement between the contracting parties as to the quantity, value and specification of the goods or establish a schedule of deliveries are only the beginning. Polish entrepreneur must now protect their interests so that the contract can be implemented smoothly, while maintaining the lowest possible transactional risk. If this is an exporter it is likely to be important to him that the terms of payment will be determined. You have to reckon with the fact that as far as our company is not a global giant, the counterparty for example from Far East will not be ready for advance payment for goods from the beginning of our cooperation.
Therefore, you should determine a safe and acceptable way of payment for both parties and make it right in the contract or other written form of agreement. Ways of settlements in foreign trade depend largely on the region of the world, political and economic situation as well as the local jurisdiction and practice. They may be letters of credit, standby letters of credit, documentary collections, bank guarantees, bills of exchange as well as international transfers with deferred payment.
In fact, selecting a proper payment instrument increases the security of your transactions.
Cases of settlements in foreign trade are particularly important in case of exports of investment. Then often Polish exporter must provide to the counterparty payment by instalment and accept the fact that the investment will be paid in full after few years. An important element is the security of future payments as well as the financing of this contract in order to get the receivables as soon as possible.
In which cases should we use the insurance company to protect our export receivables, and when to turn to the bank? What insurance companies and banks in Poland can efficiently and in a cost effective way handle such a contract? How can we offer to foreign contractor cheaper financing of his investment project than in his home country?
