EXPORT IMPORT
Hi Friends,
In this chapter, I will tell you about the procedure after finalizing good deal with buyer and prices and delivery terms are finalized.
After cracking the deal, we will send the buyer a quote sheet / price list where quantities, prices, shipping and payment terms are mentioned. If everything is ok then buyer will send you a final Purchase Order with all agreed terms and conditions related to agreement of purchase.
Sometimes, buyer needed supplier approval on purchase order or needed a signed pro-forma invoice (pre-acceptance invoice) as a token of final acceptance of order. As per the payment and delivery terms of the venture, one should move accordingly keeping important points in mind. In case there is an advance payment then before proceeding production or procurement of raw material, one should wait for the advance payment in their account first. Secondly, in case of L/C payment, we should wait for the L/C copy and after getting L/C copy (Letter of Credit), one should thoroughly check the terms and conditions that was agreed. L/C should also be checked through bank in case of any doubt because we will get the payment of the order after presentation of this L/C to the bank. This is a safe transactions as well.
After getting final order, one should prepare a list of important points against this order keeping the following points in mind -
1- - Get the credit limit against this buyer / buyer’s bank from the ECGC and get covered the order from ECGC.
2- - Follow up from production department for issuance of internal purchase order for raw material with confirmed delivery date of material in mind.
3- - Packaging team for procurement of required packaging material
4- - Prepare testing requirement on the product, if any applicable and arrange to get it tested as per buyer’s norms and with the nominated testing lab through buyer.
5- - Accounts Department to get packing credit from bank against L/C and confirmed purchase order. If the order is through confirmed L/C then bank may release good amount against order value at the initial stage for arrangement of raw materials, packaging etc. We can also pro-booked the foreign currency against confirmed order from the bank at the current applicable rate of foreign currency. This will help us to cover risk of currency devaluation once the payment is received from the buyer. This is because we get the order 2-3 months earlier and costing of the product is based strongly on applicable exchange rate of foreign currency at that time and no one knows what will be current exchange rate at the time of final export and what will be at the time of realization.
In the next chapter, I will tell you more details. Please leave a short comment about this to present this writing more better and effective way.
{ G. GANESHA }
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