Getting paid by overseas clients

Ensuring customers pay up can be the hardest part of the export process - but here are some tips to make it easier

Many companies do business with overseas customers without ever meeting, or knowing much about their company. In such cases, it can be difficult to guarantee payment – but, if your agreement is clear and you manage your customer effectively, the risk is significantly reduced.

Payment schedules

There are various ways you can schedule payment from an overseas customer. Here are some of the most common:

Payment in advance.  If you agree an advanced payment, the customer will pay you before they receive the goods – really helpful if you’re not sure about their ability to make the payment.

Letters of credit. If your customer agrees a letter of credit with their bank, the bank will send a payment to your UK bank once all the paperwork is done. You will probably have to pay your bank a commission, but you’re guaranteed timely payment.

Bill of exchange. If you instruct your bank to draw up a bill of exchange, the bank will then send the bill to the customer. Under the terms of the bill, your customer will pay you once they receive the goods, and you’ll maintain full ownership of the goods until that point.

Open account. Basically, this is just like selling goods in the UK; you supply the goods, then send an invoice, stipulating when you expect payment. You don’t have to pay anyone any commission in this case, but the risk of non-payment can be high.

Good practice

Here are some tips to help you ensure prompt, reliable payment.

Do a credit check. This can be difficult with some companies, but the more research you do, the better. The British Embassy in the customer’s company may be able to direct you to a local credit check specialist, and both the UK Chamber of Commerce and UK Trade & Investment are very helpful.

Here are some factors to bear in mind when assessing a customer:

  • Is the business solvent?
  • Does it deal with any other international suppliers?
  • Can it provide financial guarantees?
  • Has it had any previous disputes with suppliers over payment?
  • Do its website and written correspondence seem professional?

Make sure you consider all of these issues when assessing the customer’s credit.

Get everything in writing. This might seem obvious, but it’s really important. Make sure your customer gives you a written guarantee, via e-mail or letter, that they will pay you on a certain date – you can use this as evidence if they default.

Make things as easy as possible. Try and find the simplest possible payment method for your customer. Paypal is perhaps the simplest method around; although bear in mind it’s only meant for small sums of money.


Essentially, these are a set of formal standards which define the rules and protocol of international trade. Governments and trade bodies the world over respect and adhere to these terms, so it’s best to familiarise yourself with them.

There are loads of places to view the terms online; the website offers a particularly comprehensive overview.


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