Which of the following terms of payment should an international purchasing manager use to guarantee that the shipment is made and the shipper gets paid for their product?
Which of the following terms of payment should an international purchasing manager use to guarantee that the shipment is made and the shipper gets paid for their product?
A letter of credit is a document issued by a bank guaranteeing that a seller will receive payment due from a buyer provided that the delivery conditions specified in the letter are met. It ensures that the shipment is made because the seller will only get paid when proof of shipment is presented to the bank. This method provides security for both parties, making it the best choice to guarantee that the shipment is made and the shipper gets paid.
A letter of Credit payment is granted when delivery is made. Everyone wins both cash in advance and open account there is a risk . CIA risk on buyer. open account risk on seller
letter of credit (L/C)–An assurance by a bank that payment will be made as long as the sales terms agreed to by the buyer and seller are met. This method of payment for sales contracts provides a high degree of protection for the seller. Agree with Dpinv
A. Letter of credit