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Abbreviations, what they mean, how to handle, what's best starting out?

I'm selling, and notice several payment abbreviations. Not knowing what they mean, how they're handled and the implications, I just checked "Western Union". It's alphabet soup: L/C D/A D/P T/T Any help explaining what they mean and what's best for a good ole country boy in Alabama starting out would be greatly appreciated! Thanks, Scott

Posted on 2013-02-15 00:59:35

All Answers

Towards the top of page 1 is a topic called EVERY TRADE TERM (FOB, CIF, L/C, etc.)Read that and you will find answers to your questions.[em3]

2013-02-15 00:59:35

Replying to [1meme]:[em3]

2013-02-15 00:59:35

Replying to [1meme]:Not all the terms here were explained there. Can you explain more?

2013-02-15 00:59:35

Well I can help you to some extent but in all cases ,you need to go toEVERY TRADE TERM (FOB, CIF, L/C, etc.)A letter of credit from a different point of view is a Letter of Credit (LC)? sorts of Letters of Credit.Following article is from Wikipedia ...A letter of credit, often abbreviated as an LC or L/C, (the acronym LOC may also be used but this is more typically used to mean a Line of Credit) and also referred to as a documentary credit, often abbreviated as DC or D/C, documentary letter of credit, or simply as credit (in UCP 600 which is effective as from 1st July 2007) is a document issued mostly by a financial institution which provides an irrevocable payment undertaking to a beneficiary against complying documents as stated in the credit. This means that once the beneficiary or a presenting bank acting on its behalf, makes a presentation to the issuing bank or confirming bank, if any, within the expiry date of the LC, comprising documents complying with the terms and conditions of the LC, the applicable UCP and international standard banking practice, the issuing bank or confirming bank, if any, is obliged to pay irrespective of any instructions from the applicant to the contrary. In other words, the obligation to pay is shifted from the applicant to the LC issuing bank or confirming bank, if any. Non-banks can also issue LC. The LC can also be the source of payment for a transaction, meaning that an exporter will get paid by redeeming the letter of credit. Letters of credit are used nowadays primarily in international trade transactions of significant value, for deals between a supplier in one country and a wholesale customer in another. They are also used in the land development process to ensure that approved public facilities (streets, sidewalks, stormwater ponds, etc.) will be built. The parties to a letter of credit are usually a beneficiary who is to receive the money, the issuing bank of whom the applicant is a client, and the advising bank of whom the beneficiary is a client. Since nowadays almost all letters of credit are irrevocable, (i.e. cannot be amended or cancelled without prior agreement of the beneficiary, the issuing bank and the confirming bank, if any). However, the applicant is not a party to the letter of credit. In executing a transaction, letters of credit incorporate functions common to giros and Traveler's cheques Notice the following After a contract is concluded between buyer and seller, buyer's bank supplies a letter of credit to seller. Seller consigns the goods to a carrier in exchange for a bill of lading. Seller provides bill of lading to bank in exchange for payment. Seller's bank exchanges bill of lading for payment from buyer's bank. Buyer's bank exchanges bill of lading for payment from buyer. Buyer provides bill of lading to carrier and takes delivery of goods There is also a site that explained the letter of credit in a simple way. site explains it in a good and sequenced way and mentions the differences among many forms

2013-02-15 00:59:35

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2013-02-15 00:59:35