What are the settlement methods for agent export, and how to operate them?

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My company plans to find an agent to export products and would like to understand how agent export is settled. What are the key points to pay attention to during the settlement process? I hope for a detailed introduction to common settlement methods and specific operating procedures. Thank you!
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Robert Tan
Robert TanYears of service：5Customer Rating：5.0

International Market Development AdvisorStart a Chat

There are three main common settlement methods for agent export. The first is Telegraphic Transfer (T/T), where the client directly remits the payment for goods to the agent through a bank, and the agent, after deducting the agency fee, then pays the remaining amount to the principal. During operation, the principal must promptly provide accurate recipient information to the agent, and the agent, upon receiving the funds, should verify and transfer them as soon as possible.

The second is Letter of Credit (L/C), opened by the client's bank to the agent's bank. The agent ships the goods after reviewing the L/C, then collects payment from the bank with relevant documents. The principal needs to ensure product quality and delivery time, and that documents comply with L/C requirements.

The third is Collection, including Documents against Payment (D/P) and Documents against Acceptance (D/A), where documents are transmitted through a bank, and the client can only take delivery after making payment or acceptance. During settlement, the agent must strictly follow collection instructions, and the principal needs to pay attention to customer credit. Regardless of the method, settlement details must be clearly defined in the agency agreement to protect both parties' rights.

References: The Magic of Import Payment Agency Companies? Qingpu District Enterprises Must Read!
Kevin Huang
Kevin HuangYears of service：3Customer Rating：5.0

E-Commerce Export AdvisorStart a Chat

Before settlement, the calculation and payment method of the agency fee must first be clarified, which is usually charged as a certain percentage of the export amount. After the agent receives foreign exchange, they should promptly convert it into local currency to avoid exchange rate fluctuation risks.

Sophia Wang
Sophia WangYears of service：6Customer Rating：5.0

International Logistics CoordinatorStart a Chat

If settlement is via telegraphic transfer, it's important to check the arrival status of the funds, and settle promptly after confirming receipt. If a letter of credit is used, the document review stage is crucial; any discrepancies should be communicated with the client and amended in a timely manner.

Anthony Luo
Anthony LuoYears of service：10Customer Rating：5.0

Trade Compliance ExpertStart a Chat

Under the collection method, customer credit needs to be assessed; Documents against Acceptance (D/A) carries relatively higher risk. Unless the client is a long-term partner with excellent credit, D/A should be used with caution.

Daniel Kim
Daniel KimYears of service：4Customer Rating：5.0

Commodity Inspection and Quarantine ConsultantStart a Chat

During the settlement process, the principal must promptly provide customs declaration, packing list, and other documents, to facilitate the agent in handling subsequent settlement matters and ensure a smooth process.

Richard Wu
Richard WuYears of service：8Customer Rating：5.0

Global Trade Operations ExpertStart a Chat

The agent should keep detailed records during settlement and provide the principal with a detailed expense statement to ensure transparent settlement.

Emma Zhao
Emma ZhaoYears of service：3Customer Rating：5.0

Export Documentation SpecialistStart a Chat

When choosing a settlement method, a comprehensive consideration of cargo characteristics, customer credit, and market conditions is necessary to ensure capital security and settlement efficiency.

David Chen
David ChenYears of service：10Customer Rating：5.0

Trade Compliance AdvisorStart a Chat

Settlement involves foreign exchange management, so it is necessary to comply with relevant national foreign exchange policies and regulations to ensure compliant operations.

Thomas Li
Thomas LiYears of service：7Customer Rating：5.0

Import Licensing AdvisorStart a Chat

If issues arise during the settlement process, the principal and agent should communicate promptly, negotiate solutions, to avoid affecting their cooperative relationship.

User-submitted questions and answers reflect personal opinions, not the official stance of this website.

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