A.J. Anderson
International Trade Specialist
USEAC, U.S. Dept. of Commerce
515-288-8614

Method	Usual Time of Payment	Goods Available to Buyer	Risk to Exporter	Risk to Importer
Cash in Advance	Before shipment	After payment	None	Completely relies on exporter to ship goods as ordered
Letter of Credit/ Confirmed/Sight	When shipment is made	After payment	Credit Risk with Confirming Bank and Documentary Risk	Completely relies on exporter to ship goods as ordered
Letter of Credit/ Confirmed/Time	On maturity of draft	Before payment	Credit Risk with Confirming Bank and Documentary Risk	Completely relies on exporter to ship goods as ordered
Letter of Credit/ Unconfirmed/Sight	When shipment is made	Before payment	Credit risk with Issuing Bank and Documentary Risk	Is assured shipment made but relies on exporter to ship goods described in documents
Letter of Credit/ Unconfirmed/ Time of draft	On maturity	Before payment	Credit risk with Issuing Bank and Documentary Risk	Is assured shipment made but relies on exporter to ship goods described in documents
Sight draft, documents against payment	On presentation of draft to buyer – often a verbal notification receipt by the collecting to the buyer	After payment	Disposition of goods if shipment not accepted.  Involves many side risks such as exchange availability	Is assured shipment made but relies on exporter to ship goods described in documents unless he can inspect goods before payment
Time draft, documents against acceptance	On maturity of draft	Before payment	Disposition of goods if shipment not accepted.  Relies on buyer to pay draft at maturity	Is assured shipment made but relies on exporter to ship goods described in documents unless he can inspect goods before payment
Open account	As agreed	Before payment	Relies completely on buyer to pay his account as agreed upon	None