TT IN ADVANCE (BANK TRANSFER)|CHIP ONE STOP

T/T stands for Telegraphic Transfer. In other words, an international wire of funds from the buyer’s ngân hàng to the seller’s bank.

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When a Chinese supplier asks for a T/T payment, what they really mean is they want a wire transfer. (Technically, a T/T is not exactly the same as a wire transfer through the SWIFT system, but the vast majority of people think of them as the same thing.)

A wire transfer based on SWIFT is the most common payment method in international trade with Asian countries. It typically takes 3-5 working days to lớn clear, and generally costs between 25 & 50 USD, depending on your agreement with the commercial department in your ngân hàng.

What is the most common payment term requested by Chinese suppliers?

The most comtháng payment method is a ngân hàng wire that works this way:

You have sầu the supplier develop sample(s) until you are confident they know exactly what you want.You sover a 30% deposit (by T/T) before production starts.Your supplier (the manufacturer và exporter) purchases the components and/or materials, & arranges productionYou work with a unique assurance firm to inspect product unique (this is optional but usually a good idea).You skết thúc the remaining 70% (by T/T) before shipment.The supplier ships the goods and sends you the documents by express courier.

In graphical form, it looks like this:

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What is another comtháng, và better, payment term?

It is quite similar, except for the end of the process.

Once the supplier confirms the goods are ready, skết thúc an inspector lớn check unique (again, not a must, but highly advised)If quality is OK, release the goods (allow the goods to be shipped out) — this works best if you purchased under FOB termsOnce the goods are on the ship, the supplier gets the Bill of Lading (B/L), and sends you a copy of itIf the hàng hóa name, quantity, etc. are all fine on the bill of lading, you skết thúc the final payment to the supplierOnce the supplier receives the payment, they skết thúc you the original B/L

It looks lượt thích this:

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Why is it better?

The buyer knows the goods have sầu been shipped out before paying the remainder.The supplier knows the buyer can only take possession of the goods after the original bill of lading has been sent.

Can you negotiate this term? If you insist on it from the very start, và if your suppliers are motivated to work with you, probably yes. If you come out as a beginner và your orders are very small, probably not.

How lớn vì a T/T payment?

Liên hệ the commercial department of your bank, tell them you need to lớn wire (for example) 25,000 USD lớn a company in Đài Loan Trung Quốc, và they will generally give sầu you a khung khổng lồ fill out. If you vị T/Ts frequently, your ngân hàng probably has an ‘internet banking’ application that will save you time.

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Your supplier will probably skết thúc you a pro forma invoice that includes their bank account information. I strongly suggest you ask for that information earlier (as part of your pre-qualification of a potential supplier). Many buyers have been scammed by hackers who send invoices with their own bank tài khoản information…

I shot a short đoạn Clip that shows how lớn fill out a T/T application form:

After you have done this, take a screen shot, or get a digital copy, & skết thúc it to your supplier.

Important tips:

Make sure to lớn avoid any misspelling, which might cause the payment instruction khổng lồ be held in limbo for weeks!You will need to lớn write the company name in English, not in Chinese. Don’t try khổng lồ vị your own translation job, even if your written Chinese is excellent! It has to lớn match exactly the English name under that is registered in the seller’s bank records.If the company name is too long, keep writing it in the “address 1” field. This is sometimes mentioned on the T/T forms of banks that work a lot with China:

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How khổng lồ negotiate better payment terms?

There are various ways you might be able to lớn negotiate for payment of some (or all) of the amount after shipment.

Your company is well established & famous — think Apple or Disney. The risk of the buyer’s company defaulting is much lower. And the seller want lớn boast about that prestigious customer in order to lớn get more business.You arrange financing of your suppliers — as the buyer, if you have relatively strong financial guarantees and you purchase more than 1 million USD a year, you can work with a company (or a bank department) specializing in trade assurance solutions. Your supplier gets the cash when they need it, & your trương mục is debited much later.You have a buying office in China — having a svào presence in-country does help. A supplier that hasn’t been paid in time can pay you visits và take different measures khổng lồ push you for faster payment.

Renaud Anjoran has been managing his unique assurance agency (Sofeast Ltd) since 2006. In addition, a passion for improving the way people work has pushed hlặng khổng lồ launch a consultancy to improve factories & a web application lớn manage the purchasing process. He writes advice for importers on qualityinspection.org.