PAYMENT

SUPPLIER
Invoice
Pro Forma Invoice
Statement of
Account
Request
Acknowledgment
for
of
Payment
Payment
1
Agreeing to the
2
customers
3
request
Offering a
Refuse to the
compromise
customers request

CUSTOMER
Advice of
Payment
Delayed
Payment

PAYMENT
Invoice
The main documents used in trading to record payment and transactions
which give the buyer and seller information about what has been bought
or sold, the terms of the sale, and details of the transactions
Pro Forma Invoice
-if the customer has to pre-pay (pay for goods before receiving them),
they pay against the pro forma
-If the customer wants to make sure a quotation will not be changed, the
pro forma will say exactly what and how they will be charged
-If goods are sent on approval, on sale or return, or on consignment to
an agent who will sell them on behalf of the principal
-As a customs document
Statement of Account
-At the end of the period, a Statement of Account is sent to customer,
giving details of all the transactions between the buyer and seller for the
period.
-It includes BALANCE on the account, which is forward from the previous
period and listed as account rendered

METHODS OF PAYMENT

Bank draft
Bank transfer
Bill of exchange
Cheque
Credit transfer
Debit/credit card payment
Letter of credit
Cash on delivery
Post Office Giro
Postal Order
Documentary credit
International bank draft
International money order
International Post Office Giro
Promissory Note

LETS FIND OUT !

Bank Draft
The customer buy a cheque from the bank for the
amount he or she wants to pay and sends it to
the supplier.
A type of check where the payment is guaranteed
to be available by issuing bank. Typically, banks
will review the bank draft requester's account to
see if sufficient funds are available for the check
to clear. Once it has been confirmed that
sufficient funds are available, the bank effectively
sets aside the funds from the person's account to
be given out when the bank draft is used.

Sample

 Bank Transfer
A bank moves money by order from one
account to another

 Bill of Exchange (B/E)

It states that the customer will pay the
supplier an amount within a stated time.
The bill is sent direct to the customer or
paid through a bank. If the bill is a SIGHT
DRAFT, the customer will pay immediately. If
the bill is a TERM DRAFT, the customer signs
(accepts) the bill before the goods are sent
and pays later
Or
(the procedure is the same as that above),
but shipping documents usually accompany
bills when the bank acts as an intermediary
in international transactions

Sample

 Cheque
A cheque (or check) is a document that
orders a payment of money from a bank
account. The person writing the cheque,
the drawer, usually has a current account
or chequing/checking account where their
money was previously deposited. The
drawer writes the various details including
the monetary amount, date, and a payee
on the cheque, and signs it, ordering their
bank, known as the drawee, to pay that
person or company the amount of money
stated.

Sample

 Credit Transfer
The customer fills out a bank GIRO slip
and hands it to a bank. The bank then
transfers the money to the supplier

 Debit/Credit Card Payment

It can be made either direct on the phone
or on the Internet

 Letter of Credit (L/C)

A letter of credit is a document issued by a financial
institution, or a similar party, assuring payment to a seller
of goods and/or services provided certain documents
have been presented to the bank. These are documents
that prove that the seller has performed the duties under
an underlying contract (e.g., sale of goods contract) and
the goods (or services) have been supplied as agreed. In
return for these documents, the beneficiary receives
payment from the financial institution that issued the
letter of credit. The letter of credit serves as a guarantee
to the seller that it will be paid regardless of whether the
buyer ultimately fails to pay. In this way, the risk that the
buyer will fail to pay is transferred from the seller to the
letter of credit's issuer. The letter of credit can also be
used to ensure that all the agreed upon standards and
quality of goods are met by the supplier, provided that

Sample

 Cash On Delivery
Payment is made when goods have been
delivered
(or) It is a service by the Post Office.
They will deliver goods and accept
payment on behalf of the supplier

 Post Office Giro

It allows a customer to send a payment to
a supplier, whether they have a Post
Office Giro account or not

 Postal Order
It can be bought from the Post Office,
usually to pay small amounts, and send
to the supplier direct. It can either be
crossed , in which case the money can
only be paid into the suppliers account,
or left open for the supplier to cash

 Documentary Credit
When a letter of credit is accompanied by
shipping documents, it is called a
DOCUMENTARY CREDIT. The money is
credited to the suppliers account as soon
as confirmation of shipment is made

 International Bank draft

It is a cheque which a bank draws on
itself and sells to the customer, who then
sends it to the supplier. The suppliers
bank should usually have either an
account or an agreement with the
customers bank

 International Money Order (IMO)

They can be bought at most banks. The
bank fills out the order for the customer
then, for a small charge, hands the IMO
over, and the buyer sends it to the
supplier. IMOs can be either cashed or
credited to the suppliers account

 International Post Office Giro

It can be made when either the customer
or supplier, or both, do not have bank
accounts. An order for the amount to be
paid is filled out at a Post Office, which
forwards it to the Giro Centre. The Giro
Centre will send the amount to a post
Office in the suppliers country, where the
supplier will receive a postal cheque.
They can then either cash it, or pay it into
a bank acount.

 Promissory Note
It is written promise from a customer to a
supplier that the former will pay the
amount stated, either on demand or after
a certain date.

PT MAPHILINDO RAYA
Jln. Panarukan Baru No. 29 Banjarmasin 2002
Your Ref: AR/NA/2B
Our Ref:SM/FA/12

Kalimantan Selatan
15th September, 1993

Mr. Martin S. Wenger

Accounting Manger
New International Paint Company
21 Jln. Pajajaran Raya Semarang 12020
Jawa Tengah

ADVICE OF
PAYMENT

Dear Mr. Martin,

Subject: Invoice No. 287/DC
We have received your letter of 8 September and enclosed invoice No. 287/DC.
We have instructed our bank to remit the sum of US$ 19,980 for the credit of your account at
Bank Panca Niaga Semarang.
Please send us your official receipt for this settlement.
Yours sincerely,
Surya M. Kasman
Surya M. Kasman
Accounts Manager
Enc: 1

NEW INTERNATIONAL PAINT COMPANY

Jln. Pajajaran Raya No. 21 Semarang 1020
Jawa Tengah
Your Ref: SM/FA/2C
Our Ref:MS/T/2C

25th September, 1993

Mr. Surya M. Kasman

Accounts Manager
PT. Maphilindo Raya
29 Jln. Panarukan Baru Banjarmasin 2002
Kalimantan Selatan

ACKNOWLEDGEMENT OF
PAYMENT

Dear Mr. Surya,

Subject: Invoice No. 287/DC
Thank you for your letter of 15 September advising that you have made a credit transfer to our account
at Bank Panca Niaga Semarang.
Our bank has also advised us that they have received the transfer you made.
We thank you for your prompt settlement of the account and enclose our official receipt.
Yours sincerely,
Martin S. Wenger
Martin S. Wenger
Accounts Manager
Enc: 1

Dear Herr Schubert,

I am sorry that we were not able to clear your November
statement for $5,850 and December invoice, No. 7713 for
$1,289. We had intended to pay the statement as usual,
but a large cash shipment to one of our customers in
Australia was part of the cargo destroyed in the fire on
the Tippa when she docked in Bombay in late November.
Our insurance company
have promised us compensation
Ask for apology
within the next few weeks. Once we have received this,
the account will be paid
in full.the
Explain
We feel confident that you
will appreciate the situation
reason
and hope you can bear with us until the matter is settled.

Give a precise
date of
Your sincerely,
payment
D. Van Basten
D. Van Basten (Ms) Closing
Director

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Dear Ms Van Basten,

Thank you for your letter of 15 January regarding our
November statement and December invoice No. 7713.
We were sorry to hear about the difficulties you have
had, and understand the situation. However, we
would appreciate it if you could clear the account as
soon as possible, as we ourselves have suppliers to
pay.
We look forward to hearing from you soon
Your sincerely,
Dieter Schubert
Dieter Schubert
Director

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Dear Ms Van Basten,

Thank you for your letter explaining why you
cannot clear your November statement for $5,850
and December invoice No. 7713 for $1,289.
I appreciate your difficulty, but we ourselves
have to pay our own suppliers and therefore must
insist on payment within the next ten days.
We look forward to receiving your remittance.
Your sincerely,
Dieter Schubert
Dieter Schubert
Director

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Dear Mr. Franksen,

Bill No. B/E 7714
I was sorry to learn about the embargo your government has placed on
exports to Zurimba and of the problems this has created. However, the above
bill already allows credit for 40 days, and although I appreciate your offer of
an additional 6% interest on the outstanding $35,498.00, it is impossible for
me to allow a further 60 days credit as I myself have commitments.
I think the following solution might help us both.
You need not add interest on the present amount, but I have enclosed a new
draft (B/E 7731) for $17,749.00, which is half of the outstanding balance, and
will allow you 40 days to pay it. But I expect you to pay the remaining
$17,749.00 by bankers draft.
Please confirm your acceptance by signing the enclosed bill and sending it to
me with your draft by return of post.
I hope that your negotiations with the Brazilian importers have a positive
outcome and trust that this setback will soon be resolved.
Your sincerely,

N. Bhiskin
N. Bhiskin (Mr)
Director
Enc.Bill B/E 7731

Offering a Compromise

REQUEST FOR PAYMENT

Ref: RP/DG/13

BAVARIA MUSICAL MANUFACTURER

Jln. Cemani Raya Dua No. 25 Bogor 20019
Jawa Barat
25th July, 1993

First Request

Mr. Alwin B. Tando

Chief Accountant
PT. Mahkota Raya Abadi
21 Jln. Mahkota Raya Ujung Pandang 1007
Sulawesi Selatan

Dear Mr. Alwin,

Subject: Statement-May 1993
We regret having to remind you that we have not received payment of the balance of Rp 15,500,000 due on our
statement for May, sent to you on 15 June.
Reminding
the payment
We enclose a copy of the statement and would remind you that weStating
quoted unusually
low prices on the
the enclosure
ofgoods you
ordered.
the invoice/pro forma
We look forward to your remittance by return.
invoice/ statement of

Expecting the settlement

account

Yours sincerely,
Rahardian P. Ramlan
Rahadian P. Ramlan
Accounts Manager
Encl:1

Ref: RP/DG/13

BAVARIA MUSICAL MANUFACTURER

Jln. Cemani Raya Dua No. 25 Bogor 20019
Jawa Barat
1st August, 1993

Mr. Alwin B. Tando

Chief Accountant
PT. Mahkota Raya Abadi
21 Jln. Mahkota Raya Ujung Pandang 1007
Sulawesi Selatan

Second Request

Dear Mr. Alwin,

Subject: Statement-May 1993

Mentioning the
We regret having to remind you again that on 25 July we wrote reminding you that on 15 Juneprevious
we sent you our
correspondence and
statement for May, showing a balance of Rp 15,500,000 is still outstanding.
any
relevant
As settlement of this account is now more than two months overdue, we must ask including
you to send your
remittance
within
Insisting
the
settlement
invoice/statement
the next few days, or at least you can give us an explanation of the delay in making payment.
We hope it will not be necessary to send you any further reminder.
Yours sincerely,
Rahardian P. Ramlan
Rahadian P. Ramlan
Accounts Manager

Closing

BAVARIA MUSICAL MANUFACTURER

Jln. Cemani Raya Dua No. 25 Bogor 20019
Jawa Barat
Ref: RP/DG/13
Mr. Alwin B. Tando
Chief Accountant
PT. Mahkota Raya Abadi
21 Jln. Mahkota Raya Ujung Pandang 1007
Sulawesi Selatan

21st September, 1993

Third Request/
Final Demand

Dear Mr. Alwin,

Subject: Statement-May 1993

Reviewing the situation

We have reminded you twice and it is still very difficult to understand why we have not from
heard from
youtime
any reply
to our two
the
account
previous letters about the sum of Rp 15,500,000 due on May statement.
should have been paid.
that
you
We are sure you will agree that we have shown you every consideration and now, you willExplaining
understand that we
cannot
wait
indefinitely for settlement.
have been patient
Legaloutstanding
action is
If payment is still not made within fourteen days, we shall instruct our solicitor to recover the amount
threatened
Yours sincerely,
Rahardian P. Ramlan
Rahadian P. Ramlan
Accounts Manager