Payment risks of international transactions

For exporters of goods and services, serious consideration must be put into balancing the potential benefits of providing favourable payment terms with the risk of payment default and the costs of international debt recovery.

It is beyond the scope of this article to cover all of the issues surrounding cross border debt recovery and insolvency, however, it is fair to say that this can often be a complicated, time consuming and expensive exercise.

Any exporters that provide payment terms on account should have debt collection procedures in place, which are specific to the type of transaction, type of client and contemplates enforceability of any judgments or awards in the countries in which the customer does business or holds assets.