Cash in Advance (CIA)

'''Russian: [http://ru.scm.gsom.spbu.ru/Предоплата Предоплата]'''

'''Russian: [http://ru.scm.gsom.spbu.ru/Предоплата Предоплата]'''

== '''General Provisions''' ==

== '''General Provisions''' ==

Under the “cash in advance (CIA)” term they understand such methods of payment where a buyer sends payment in the agreed currency and through agreed method to a seller before the product is manufactured and/or shipped. Upon receipt of payment this seller then ships the goods and all the necessary shipping and commercial documents directly to the buyer. With this payment method, the exporter can avoid credit risk, since payment is received prior to the transfer of ownership of the goods. Wire transfers <ref> Under this historically tied with a telegraph transfer (T/T) term they understand an electronic transfer of funds across a network administered by hundreds of banks around the world. Wire transfers allow for individualized transfer of funds from single individuals or entities to other individuals or entities, while still maintaining efficiencies of fast and secure movement of funds. Wire transfers allow people in different geographic locations to easily transfer money to locales and financial institutions around the globe. For providing the service, banks will collect a fee, sometimes based upon the size of the transfer being made. Outside of USA, wire transfers are sometimes referred to as a 'telegraphic transfer' or T/T. - http://www.investopedia.com/terms/w/wiretransfer.asp </ref>and credit cards <ref> A card issued by a financial company giving the holder an option to borrow funds, usually at point of sale. Credit cards charge interest and are primarily used for short-term financing. Interest usually begins one month after a purchase is made and borrowing limits are pre-set according to the individual's credit rating. - http://www.investopedia.com/terms/c/creditcard.asp </ref>are the most commonly used cash-in-advance options available to exporters. However, requiring payment in advance is the least attractive option for the buyer, as this method creates cash flow problems. Foreign buyers are also concerned that the goods may not be sent if payment is made in advance. Thus, exporters that insist on this method of payment as their sole method of doing business may find themselves losing out to competitors who may be willing to offer more attractive payment terms. Payment is usually made with an electronic SWIFT (Society for Worldwide Interbank Financial Telecommunication) <ref> A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) uses a standardized proprietary communications platform to facilitate the transmission of information about financial transactions. This information, including payment instructions, is securely exchanged between financial institutions. SWIFT neither holds funds nor manages client accounts. It began operating in 15 countries in 1973 and now operates in 210 countries. By April 2012, the co-op was delivering an average of 18,306,753 messages a day - up from 12,265,837 messages per day in January 2007. SWIFT is headquartered in Belgium and has offices in the United States, Brazil, Australia, India, Japan, Korea, Austria, Belgium, France, Germany, Italy, South Africa, Spain, Sweden, Switzerland, the United Kingdom, UAE and Russian Federation. - http://www.investopedia.com/terms/s/swift.asp </ref>fund transfer from the customer's bank to the exporter's bank.

Under the “cash in advance (CIA)” term they understand such methods of payment where a buyer sends payment in the agreed currency and through agreed method to a seller before the product is manufactured and/or shipped. Upon receipt of payment this seller then ships the goods and all the necessary shipping and commercial documents directly to the buyer. With this payment method, the exporter can avoid credit risk, since payment is received prior to the transfer of ownership of the goods. Wire transfers <ref> Under this historically tied with a telegraph transfer (T/T) term they understand an electronic transfer of funds across a network administered by hundreds of banks around the world. Wire transfers allow for individualized transfer of funds from single individuals or entities to other individuals or entities, while still maintaining efficiencies of fast and secure movement of funds. Wire transfers allow people in different geographic locations to easily transfer money to locales and financial institutions around the globe. For providing the service, banks will collect a fee, sometimes based upon the size of the transfer being made. Outside of USA, wire transfers are sometimes referred to as a 'telegraphic transfer' or T/T. - http://www.investopedia.com/terms/w/wiretransfer.asp </ref>and credit cards <ref> A card issued by a financial company giving the holder an option to borrow funds, usually at point of sale. Credit cards charge interest and are primarily used for short-term financing. Interest usually begins one month after a purchase is made and borrowing limits are pre-set according to the individual's credit rating. - http://www.investopedia.com/terms/c/creditcard.asp </ref>are the most commonly used cash-in-advance options available to exporters. However, requiring payment in advance is the least attractive option for the buyer, as this method creates cash flow problems. Foreign buyers are also concerned that the goods may not be sent if payment is made in advance. Thus, exporters that insist on this method of payment as their sole method of doing business may find themselves losing out to competitors who may be willing to offer more attractive payment terms. Payment is usually made with an electronic SWIFT (Society for Worldwide Interbank Financial Telecommunication) <ref> A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) uses a standardized proprietary communications platform to facilitate the transmission of information about financial transactions. This information, including payment instructions, is securely exchanged between financial institutions. SWIFT neither holds funds nor manages client accounts. It began operating in 15 countries in 1973 and now operates in 210 countries. By April 2012, the co-op was delivering an average of 18,306,753 messages a day - up from 12,265,837 messages per day in January 2007. SWIFT is headquartered in Belgium and has offices in the United States, Brazil, Australia, India, Japan, Korea, Austria, Belgium, France, Germany, Italy, South Africa, Spain, Sweden, Switzerland, the United Kingdom, UAE and Russian Federation. - http://www.investopedia.com/terms/s/swift.asp </ref>fund transfer from the customer's bank to the exporter's bank.