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 lớn the seller’s ngân hàng.

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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 lớn clear, & generally costs between 25 and 50 USD, depending on your agreement with the commercial department in your bank.

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

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

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

In graphical khung, it looks like this:


What is another comtháng, and better, payment term?

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

Once the supplier confirms the goods are ready, send an inspector to lớn kiểm tra unique (again, not a must, but highly advised)If chất lượng is OK, release the goods (allow the goods to lớn 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), & sends you a copy of itIf the hàng hóa name, quantity, etc. are all fine on the bill of lading, you sover the final payment khổng lồ the supplierOnce the supplier receives the payment, they skết thúc you the original B/L

It looks like this:


Why is it better?

The buyer knows the goods have 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, & if your suppliers are motivated to lớn work with you, probably yes. If you come out as a beginner and your orders are very small, probably not.

How to lớn bởi vì a T/T payment?

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

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Your supplier will probably send you a pro forma invoice that includes their ngân hàng trương mục 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 skết thúc invoices with their own bank trương mục information…

I shot a short đoạn phim that shows how to 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 lớn your supplier.

Important tips:

Make sure khổng lồ avoid any misspelling, which might cause the payment instruction khổng lồ be held in limbo for weeks!You will need lớn write the company name in English, not in Chinese. Don’t try to lớn vì your own translation job, even if your written Chinese is excellent! It has khổng lồ match exactly the English name under that is registered in the seller’s ngân hàng 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:


How to lớn negotiate better payment terms?

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

Your company is well established và famous — think Apple or Disney. The risk of the buyer’s company defaulting is much lower. And the seller want khổng lồ boast about that prestigious customer in order khổng lồ get more business.You arrange financing of your suppliers — as the buyer, if you have relatively svào 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, and your trương mục is debited much later.You have sầu 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 & take different measures lớn push you for faster payment.

Renaud Anjoran has been managing his chất lượng assurance agency (Sofeast Ltd) since 2006. In addition, a passion for improving the way people work has pushed hyên to launch a consultancy khổng lồ improve factories and a website application khổng lồ manage the purchasing process. He writes advice for importers on