Getting paid when exporting
Research overseas customers' and markets' creditworthiness
To minimise the risks of non-payment, you should research the market conditions in your target country and the credit worthiness of potential customers before you start trading.
Understand country risks
Start by building an overall picture of payment practices in your customer's country:
The political situation - war, civil unrest, corruption or security issues might affect payments. Changes in government could lead to embargoes or the introduction of tariffs.
The economic situation - stability and sustained growth in the local economy will mean more potential customers are solvent. Check there are no problems with the supply of money in your target market.
Foreign exchange and banking conditions - you will be exposed to foreign exchange fluctuations when selling overseas unless your customer agrees to pay in sterling, thus taking on the risk. An historically stable currency will minimise your risk. Read more about foreign currency and exchange risks. Check the stability of the banking sector - this can affect the efficiency and speed of your receiving payment. Find banking and other business information in your target market.
The UK's relationship with the target market - what are the prevailing conditions? For example, are specific trading agreements in place?
Read more about researching and entering overseas markets.
Understand buyer risks
You will need to assess your potential customer's financial position and trading record to limit the possibility of non-payment. The most common causes of non-payment are the buyer becoming insolvent or simply refusing to pay.
It's essential to carry out a credit check on potential overseas customers. This will indicate how they have kept up with their liabilities in the past.
Invest Northern Ireland can provide a range of support services to businesses thinking about investing overseas.
UK Export Finance also provides help to exporters through its Export Credit Insurance scheme. New exporters can contact the UK Export Finance Enquiry Line on Tel 020 7271 8010.
The Authorised Economic Operator (AEO) certification scheme is aimed at reducing security risks in your supply chain as businesses registered as AEOs will have undergone checks on their commercial and financial management record.