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Source: Mushroom Trade Mushroom Trade

Mixed Payments

Published: 17 Apr 2013 23:02:38 PST
Quite often you can compromise with the buyer by using different terms of payment for one transaction.
Remember that I suggested you insist the buyer pay in advance when the goods are required to be customised? I also mentioned that "cash in advance" is the least preferred term for the buyer. The solution is mixed payments. You estimate the cost involved in customisation,
which has to be prepaid and the balance may be payable under different terms, L/C, for instance.
When you experience difficulties with cash flow and do not have available funds to prepay freight and other pre-shipment expenses, you also may consider mixed payments.
Using mixed payments, you can avoid losses, which occur when the buyer refuses the payment under the sight draft.
If the mixed payments were negotiated, the proportion has to be clearly indicated in the contract of sale. For example:
"Terms of Payment:
20% cash with the order
80% by irrevocable Letter of Credit confirmed by first class bank and payable at sight via the-advising-bank's-name and location in favour of your-company-name"
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