In international trade practice, a significant place is occupied by settlements in the form of an open account, used in settlements between counterparties associated with permanent trade relations. This form of payment is the cheapest and is relatively easy to execute, but extremely risky. It has gained extreme popularity in payments between EU countries (up to 60% of all payments).

Open account- a form of settlement and credit relations in which the exporter (seller) ships the goods to the importer (buyer) without payment and at the same time sends documents of title to him (an invoice for payment) debiting the amount of debt to the account opened by him in the name of the buyer - an open account. Once the accounts have been reconciled, the final settlement of outstanding balances on the open account is made through banks, usually using a wire transfer or check. Therefore, banking statistics often include open account settlements in bank transfers.

In practice, the procedure for repaying debt on an open account depends on the agreement between the counterparties. With regular deliveries, settlements between counterparties are possible not for each individual batch of goods, but at certain times - the end or beginning of a month or quarter. An even more complex version of interaction between partners is possible, when products are supplied by both parties to the contract. In this case, there is bilateral lending and offset of mutual claims, which are reflected in a single account or current account. Firms can offset mutual claims on a non-currency basis.

The technology for making payments on an open account is presented graphically in Figure 8.

Fig.8. Scheme of settlements for an open account

A contract is concluded between the importer and the exporter.

The exporter ships the goods to the importer and separately sends documents of title (invoices, waybills or bills of lading, certificates, etc.)

The exporter enters the amount of the shipped goods in the debit of the account opened for the buyer, and the importer makes the same entry in the credit of the exporter’s account, i.e. the amount of current debt is recorded in the books of trading partners.

After receiving the goods by the importer, both parties reconcile the settlements on the open account and make compensating entries.

The importer sends an application for bank transfer to the bank.

The importer's bank, having accepted the payment order from the importer, sends the payment order on its behalf to the corresponding bank of the exporter.

Having received the payment order, the bank verifies its authenticity and performs an operation to credit the money to the exporter’s account.

Open account settlements are most beneficial for the importer, since he makes subsequent payments for the goods received, and interest for the loan provided is not charged separately: there is no risk of paying for undelivered or unaccepted goods. For the exporter, this form of payment is the least profitable, since it does not contain a reliable guarantee of timely payment, slows down the turnover of its capital, and sometimes makes it necessary to resort to a bank loan. The risk of non-payment by the importer of goods when using this form of payment unilaterally is similar to the risk of under-delivery of goods by the exporter when making advance payments. In fact, this form of payment is used to lend to the importer and reflects the exporter’s confidence in him. Therefore, this form of payment is usually used only on the basis of reciprocity, when counterparties alternately act as seller and buyer, and failure to fulfill obligations by the importer entails the suspension of goods supplies by the exporter. For one-way deliveries, open account settlements are rarely used.

Particular importance is attached to the forms of payment when concluding foreign trade contracts. The correct choice of payment form guarantees that the seller receives money and the buyer receives the goods. What form of payment to choose, how to stipulate it in the contract, how to reduce the risks of the buyer and seller - all these issues are important when carrying out foreign economic activities of an enterprise.

The main forms of payment used in international practice are:

• – documentary collection;
• – documentary letter of credit;
• – bank transfer;
• – open account (rarely used).

International payments, unlike domestic ones, have some features:

• – registration, forwarding, processing and payment of invoices is more difficult;
• – the payment procedure must comply with accepted international rules;
• – calculations are, as a rule, documentary in nature.

Documentary settlements– payments made upon presentation of documents.

Acts certifying the fact of transportation of goods, their valuation, insurance, etc. can be used as documents. Such documents include, for example, railway waybills, sea bills of lading, insurance policies, invoices, certificates of origin, quality certificates, etc.

The main forms of documentary payments are documentary collection and documentary letter of credit.

Documentary collection– collection of certain debts through a bank, for example, collection by the seller (exporter) of amounts due to him from the buyer (importer) upon provision of documents through the bank.

To carry out such an operation, there are international rules adopted in Paris in 1978 by the International Chamber of Commerce (ICC) - “Uniform Rules for Collection”. These rules are followed by banks in most countries of the world, including Russian banks.

Rice. 7.1.

The “documentary collection” operation is carried out in the following sequence (Fig. 7.1):

• 1. An agreement is concluded between the seller (exporter) and the buyer (importer) for the supply of a certain product, which states that payments for the transaction will be made in the form of collection.
• 2. The seller ships the goods, for example, by sea freight, and receives from the freighter documents certifying the fact of shipment of the goods (sea bills of lading).
• 3. The seller presents bills of lading, along with other documents provided for by the terms of the agreement, to his bank (remitting bank) for collection.
• 4. Remitting bank, i.e. the seller's bank forwards the received documents to the buyer's bank (collecting bank).
• 5. The collecting bank notifies the importer about the availability of collection.
• 6. The buyer (importer) pays the collected amount and receives the documents.
• 7. The buyer presents documents to the freighter and takes possession of the goods.
• 8. The buyer's bank (collector bank) pays the collection amount to the seller's bank.
• 9. The seller’s bank (remitting bank) credits the money to the seller’s account.

It should be noted that the client’s provision of documents to the remitting bank (seller’s bank) and forwarding of documents to the collecting bank (buyer’s bank) can only be carried out if there is a collection order with exact collection instructions, for which there are appropriate forms.

The collection operation is a fairly reliable form of payment, but there are certain risks associated with making payments in this form:

• – for the seller the risk is that at the time of sending the goods there is no guarantee that the buyer is solvent. In addition, transport documents, such as sea bills of lading, confirming the dispatch of goods, allow the buyer to receive the goods without prepayment;
• – for the buyer There is also a risk: he pays without receiving the goods.

It is necessary to note the advantages of this operation:

• – for the seller This form of payment is advantageous in that he can request money by submitting documents, i.e. before the buyer receives the goods. It is this point that is very important during long-distance transportation or long-term customs formalities;
• – for the buyer the advantage is that he will receive goods that meet the terms of the transaction (i.e. of a certain quality, in the appropriate quantity, etc.).

Documentary letter of credit- an obligation that the bank undertakes by order of the customer (buyer) and which includes the payment of a certain amount to the specified beneficiary (seller) upon submission of a specified set of documents by a specified deadline.

The rules for international letter of credit transactions are set out in a special document “Uniform Rules and Customs for Documentary Letters of Credit”. This document was adopted by the ICC in Paris in 1983.

Rice. 7.2.

A transaction under a documentary letter of credit is carried out in the following order (Fig. 7.2):

• 1. An agreement is concluded between the seller and the buyer for the supply of a certain product, which states that payments for the transaction will be carried out in the form of a letter of credit.
• 2. The buyer (importer) will instruct his bank (issuing bank) to open a letter of credit.
• 3. The issuing bank (buyer’s bank), which opens the letter of credit, forwards it to its correspondent bank in the seller’s country.
• 4. The bank in the seller's country advises the letter of credit to the beneficiary (seller).
• 5. The seller (exporter) ships the goods (by sea) and receives transport documents (sea bills of lading) from the charterer.
• 6. The seller presents the documents required by the letter of credit to the advising bank (a bank in the seller’s country).
• 7. The advising bank checks the documents. They must comply with the terms of the letter of credit. If the terms of the letter of credit are met and if this bank is authorized to make the payment, then the equivalent of the amount according to the documents is paid to the beneficiary (seller).
• 8. The advising bank forwards the documents to the bank opening the letter of credit (issuing bank).
• 9. The issuing bank (opening the account) transfers the documents to the buyer (importer) and at the same time debits him the equivalent amount for the documents.
• 10. The buyer receives documents and uses them to receive the goods.

Unlike collection, a letter of credit includes a commitment from at least one of the banks. The monetary obligation of the bank opening the letter of credit is based on it.

A special feature of a letter of credit transaction is that in essence it is independent in relation to the purchase and sale agreement. Participants in a transaction work with documents, and not with the goods or services to which the documents are associated. Based on this, it can be noted that in letter of credit transactions the main criterion is the quality of the required documents. The task of banks is to thoroughly check documents for: compliance with current requirements for the form, absence of contradictions between documents and completeness of the set.

A documentary letter of credit is a reliable tool for ensuring settlements and payments in transactions between partners who do not trust each other enough.

This form of payment also has its risks:

• – for the seller the risk is that, despite fulfilling all the conditions of the letter of credit, he will not receive payment of the letter of credit if the opening bank is unable to pay the amount according to the documents (for example, currency difficulties have arisen in the country of the bank opening the letter of credit);
• – for the buyer the risk is that he may not receive delivery in full accordance with the contract.

This form of payment has a number of advantages:

• – for the seller the main advantage is that this form of payment provides greater protection against the risk of insolvency of the buyer, since he receives a payment obligation from the bank;
• – for the buyer The advantage is that payment is made only when the goods have been dispatched to the recipient and the conditions set out in the letter of credit have been met.

Bank transfer- a form of payment in which the buyer instructs the bank serving him to transfer a certain amount to another country and pay the recipient the transfer.

This form of calculation is carried out in the following sequence (Fig. 7.3):

Rice. 7.3.

• 1. An agreement is signed between the relevant parties (seller - buyer) for the supply of goods, which specifies the form of payment.
• 2. The exporter (seller), within the time period established by the contract, sends the importer (buyer) a commercial invoice, transport documents (received from the carrier) and other documents provided for by the contract.
• 3. The buyer, having received the documents, submits a transfer order to his bank.
• 4. The buyer’s bank, on the basis of a payment order, transfers currency to the seller’s bank, sending it a payment order.
• 5. The seller’s bank, having received the payment order, credits the amount specified in the agreement to the account of the beneficiary (seller).

Bank transfer is the simplest, cheapest and most efficient form of making payments. But the limitation of this form of payment for commodity supplies is explained by a significant risk for both parties:

• – when making payments by transfer to the final settlement (after delivery of the goods), the exporter (buyer) faces the risk of non-payment for the delivered goods;
• – with advance payments by the importer (buyer), there is a risk of non-delivery of goods after prepayment.

Open account– a special form of payment used by counterparties to a foreign economic transaction.

Rice. 7.4.

As a form of international payments, an open account (Fig. 7.4) is used quite rarely and is carried out in the following sequence:

• 1. The seller and buyer open accounts in which the debt is recorded.
• 2. After shipping the goods, the seller sends the shipping documents to the buyer and records the amount for the shipped goods.
• 3. The buyer receives the documents provided for in the contract and receives the goods.
• 4. Within the period established in the contract, the buyer repays the debt. He sends a payment order to the bank to transfer the amount at the expense of the seller, or the buyer sends a check or bill, depending on the conditions stipulated by the agreement.

Settlements on an open account are only possible if enterprises and partner firms have long-term business relationships and fully trust each other, since with this form of payment the seller has no guarantee of receiving payment. Payment for the goods is made after all rights to it have transferred to the buyer.

In addition to payment forms, an important place in the contract is given to basic terms of delivery of goods, since the price of the product ultimately depends on this.

For export-import operations, it also means settlements on an open account. These loans are provided in settlements between regular partners (counterparties), especially for multiple deliveries of similar goods. The essence of loans or settlements on an open account is that the seller ships the goods to the buyer and sends documents of title to him, debiting the amount of the debt to the account opened in the name of the buyer. Within the terms specified in the contract, the buyer repays his debt on the open account. For the buyer, an open account is a favorable form of payment and obtaining a loan, since in this case there is no risk of paying for undelivered goods, and interest for using such a loan is usually not charged. Business entities using an open account, as a rule, act alternately as sellers and buyers, which is one of the ways to ensure that the parties fulfill their payment obligations.
An overdraft is a negative balance in a bank client's current account. Overdraft is a form of short-term loan, which is provided by the bank debiting funds from the client's account in excess of the balance in the account. As a result of such an operation, a negative balance is formed, i.e. debit balance – the client’s debt to the bank. The bank and the client enter into an agreement between themselves, which establishes the maximum overdraft amount, the terms of the loan, the procedure for repaying it, and the amount of interest on the loan. With an overdraft, all amounts credited to the client’s current account are used to repay the debt. Therefore, the amount of credit changes as funds become available, which distinguishes an overdraft from a regular loan. In the Russian Federation, banks almost never provide overdrafts. Abroad, it is used quite widely.
In the USA, overdraft can be provided free of charge for bank customers who have had an account with the bank for a long time.
The overdraft form of credit first originated in England and is now practiced in most developed countries.
Acceptance credit is a loan provided by a bank in the form of acceptance of a bill of exchange (draft) issued to the bank by exporters and importers. With this form of credit, the exporter is able to issue bills of exchange to the bank for a certain amount within the credit limit. The bank accepts these bills, thereby guaranteeing their payment by the debtor on time.
When selling goods on credit, exporters are interested in the bill of exchange being accepted by a large bank. Such a bill can be discounted or sold. With an acceptance credit, the loan is formally provided by the exporter, but unlike a bill of exchange credit, the bank is the acceptor of the bill. By issuing an acceptance, the bank does not provide a loan or invest its own funds in the transaction, but undertakes to pay the draft when payment is due. In cases where the exporter requires payment in cash, refinancing operations are carried out, i.e. The importer's bank accepts the draft issued to it by the importer, takes it into account and pays the exporter in cash. The cost of an acceptance credit consists of two elements: the acceptance fee and the discount rate, which is usually lower than the bill discount rate.
The term "acceptance credit" is usually used in cases where banks accept drafts only from exporters of their country. A type of acceptance loan is an acceptance-rambus loan.
Rambus in international trade means payment for the purchased goods through the bank in the form of acceptance by the importer's bank of drafts issued by the exporter. The term "acceptance-rambus credit" is used in cases where banks accept drafts drawn on them by foreign commercial banks. These banks play a supporting role and assume responsibility to the accepting banks for the timely transfer (rembusting) to their accounts of the currency necessary for payment of accepted drafts.

More on the topic Credit on an open account:

1. A mechanism for bank lending to trade organizations to replenish working capital on the basis of one-time loans and lines of credit.

Open account settlements involve periodic payments from the importer to the exporter upon receipt of the goods. The amount of current debt is recorded in the books of trading partners. This form of international payment is associated with open account credit. The settlement procedure (Fig. 6.2) is determined by an agreement between counterparties, which provides for periodic payments within specific periods (after completion of deliveries or resale of goods by the importer in the middle or end of the month). Once the settlements have been verified, final settlement of outstanding balances on an open account is carried out primarily using a bank transfer or check. Therefore, banking statistics often classify open account settlements as bank transfers.

Figure 6.2. V

1 - supply of products, provision of services and sending of documents;

2 - providing instructions for the transfer of funds to the exporter;

3-transfer of funds from bank to bank;

4 - advice from the exporter about the transfer of funds.

An open account is used for settlements between: companies connected by traditional trade relations; TNK and ITS foreign branches for export supplies; exporter and brokerage firm; mixed firms with the participation of an exporter; for goods sent on consignment for sale from a warehouse; for the sale of its own goods to a foreign branch.

An open account is also used during transactions with customer-supplied raw materials with mandatory payment for it, when the entities are alternately an exporter and an importer.

For any form of payment, the contract must also note:

o full name of the exporter's bank;

o legal address of the exporter’s bank;

o code/MFI of the exporter’s bank;

o number of the exporter’s bank account to which funds will be credited;

o full name of the importer's bank;

o legal address of the importer’s bank;

o code/MFO of the importer's bank;

o number of the importer's bank account from which funds will be transferred.

Open account payments are used for regular deliveries, when trust is strengthened by long-term business relationships and the buyer is a reliable company.

The peculiarity of this form of payment is that the movement of goods is ahead of the movement of money. In this case, settlements are divorced from commodity supplies and are associated with a commercial loan, under which the exporter unilaterally credits the importer. If mutual deliveries of goods occur simultaneously with subsequent settlements on an open account, then they are reflected on the account (single account), that is, bilateral lending and offset of mutual claims occur.

Open account settlements are most beneficial for the importer, since he has a certain deferred payment for the absence of risk regarding the volume of packaging and the delivery time of the goods. For the exporter, this form of payment is the least profitable, because it does not guarantee timely payment, slows down capital turnover, and sometimes makes it necessary to resort to a bank loan. The risk of non-receipt of funds for shipped goods when using this form of payment unilaterally is similar to the risk of non-delivery of goods by the exporter with advance payments. In fact, this form of payment is used for lending to the importer; it reflects the exporter’s confidence in him. Most often, they resort to it on the basis of reciprocity, when counterparties alternately act as seller and buyer, since failure to fulfill obligations by the importer entails the suspension of goods supplies by the exporter. For unilateral deliveries, open account settlements are used less frequently.

Settlements under compensation agreements are carried out in a form generally accepted in international practice (open account, letter of credit, etc.).

The procedure for making payments for imported and exported goods (services) is regulated by the legislation of the Republic of Belarus, and is also subject to international rules for the documentation and payment of payment documents.

All payments related to the export and import of goods and services are carried out through authorized banks.

Payment for foreign trade contracts is made, as a rule, in one of the following forms of payment - open account, bank transfer, collection, letter of credit.

The form of payment represents the methods of registration, transfer and payment of title and payment documents established in international commercial and banking practice.

The specified forms of international payments are used on the terms of payment both in cash and on credit.

The choice of a specific form of international payments is determined by agreement of the parties.

The forms of international payments used differ in the share of participation of commercial banks in their implementation. A minimum share of participation of banks is assumed when making a bank transfer, i.e. fulfillment of the client's payment request. A more significant part of the participation of banks in carrying out collection operations is control over the transfer, forwarding of documents of title and their issuance to the payer in accordance with the terms of the principal. The maximum share of participation of banks is in settlements using letters of credit, which is expressed in providing the recipient (beneficiary) with a payment obligation, implemented subject to compliance with the conditions contained in the letter of credit.

With different forms of payment, the degree of ensuring the reliability of payment for the exporter is not the same: it is minimal when making payments by bank transfers and collection for goods actually delivered and is maximum when making payments by letters of credit, since it is a monetary guarantee of payment for the shipped goods by the bank that opened it.

An open account is one of the forms of settlements in foreign trade. The essence: direct delivery to the foreign buyer of both goods and trade documents, payment for which the importer makes within the period stipulated in the contract. If this period exceeds the terms of the current legislation, then an open account is considered not as a form of cash payment, but as payment on credit.

As a rule, with this form of payment, firms open accounts in their books for each other, in which mutual debts are taken into account (offset). This operation is carried out without the participation of the bank, which can be involved in some cases, mainly at the final stage of operations, when it is necessary to balance the balance and make a transfer of the amount remaining uncovered by the goods.

After shipment of the goods, the exporter makes an entry in his accounting books for the amount due as a debit to the open account, and the importer makes a similar entry to the credit of the account opened to the exporter.

An open account thus provides for commercial lending to the buyer. It is always unprofitable for the exporter because it is associated with increased risk. As a rule, this form is used between long-term cooperating firms that carry out commodity exchange operations, acting simultaneously as sellers and buyers, between branches of large companies, etc.

The advisability of using an open account in calculations may be dictated by the following circumstances:

if deliveries are carried out in small batches regularly on schedule; counter deliveries; between branches of large companies.

A bank transfer is a simple order from a bank to its correspondent bank to pay a certain amount of money at the request and at the expense of the transferor to a foreign recipient (beneficiary), indicating the method of reimbursement to the paying bank for the amount paid.

Bank transfers are carried out non-cash through payment orders addressed from one bank to another. Sometimes transfers are made through bank checks or other payment documents. With this form of payment, documents of title are sent from the exporter to the importer directly, i.e. bypassing the bank.

When performing a transfer operation, the transferee's bank is guided by specific instructions contained in the payment order.

When conducting a transfer operation, banks take part in settlements by transfer only after the payer submits a payment order to the bank to pay for the contract. However, banks are not responsible for payment. Banks do not control the delivery of goods or the transfer of documents to the importer, as well as the execution of payment under the contract. With this form of payment, the bank’s responsibilities include only transferring the payment from the account of the transferor to the account of the transferee at the time of submission of the payment order (Fig. 10).

In international banking practice, bank transfers can be used to pay an advance on a contract if its terms contain a provision on the transfer of part of the contract value (15-30%) in advance, i.e. before the goods are shipped. The rest is paid for the actual goods delivered. An advance payment actually means hidden lending to the exporter and is unprofitable for the importer. In addition, the transfer of an advance creates for the importer the risk of losing money in the event of failure by the exporter to fulfill the terms of the contract and non-delivery of goods.

In order to protect the importer from the risk of non-repayment of the advance in the event of non-delivery of goods by the exporter, there are several protection methods in international banking practice:

1. obtaining a bank guarantee for the return of the advance; in this case, before transferring the advance payment, a guarantee from a first-class bank is issued;

2. use of documentary or conditional translation. Here, the exporter's bank actually credits the advance to his account, subject to the submission of transport documents by him within a certain period.