Payment term DAP...
Post 1 of 8
I have a reputed customer whos asking his volume business to be on DAP bases. I need to know is it save to work on DAP bases as at a first attempt. Any urgent advises will be highly appreciated.
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16 Mar 2006 23:41
Post 2 of 8
Replying to [adimanu]:
i think it is D/P not DAP.a term of payment, right?
it's not safe for the seller. you send the goods in advance, and send the document to their bank.
if it is D/P at sight. your customer need pay the money to the bank at once then he can get the document and clean the goods. and the bank will remit the money to you.
if it is at 30 days sight or more. he can get the document in advance by writing a billt or what to the bank. when it is at term. he pay the money to the bank to expiate the bill.
i think it is D/P not DAP.a term of payment, right?
it's not safe for the seller. you send the goods in advance, and send the document to their bank.
if it is D/P at sight. your customer need pay the money to the bank at once then he can get the document and clean the goods. and the bank will remit the money to you.
if it is at 30 days sight or more. he can get the document in advance by writing a billt or what to the bank. when it is at term. he pay the money to the bank to expiate the bill.
17 Mar 2006 00:16
Post 3 of 8
Replying to [allenscafe]:
DAP i think is Document against Payment which is exactly the same as D/P.
There is no D/P or DAP at Sight, as far as I know.
Banks will be involved here of course and when the Buyer release the docs really depends on the Buyer themself.
DAP i think is Document against Payment which is exactly the same as D/P.
There is no D/P or DAP at Sight, as far as I know.
Banks will be involved here of course and when the Buyer release the docs really depends on the Buyer themself.
17 Mar 2006 00:37
Post 4 of 8
Replying to [adimanu]:
Friend "Allenscafe" is mostly correct. He said: "I think it is D/P not DAP.a term of payment, right? It's not safe for the seller. you send the goods in advance, and send the document to their bank.
If it is D/P at sight. your customer need pay the money to the bank at once then he can get the document and clean the goods. and the bank will remit the money to you."
Only a few additional comments:
(1) DAP and D/P are the same, both meaning Documents (Against) Payment.
(2) DAP (i.e. * bills) are always SIGHT bills.
(3) Only D/A (Documents against Acceptance) bills are payable after a delay, NOT D/P bills.
(4) D/P bils are relatively safer than D/A bills. For DA bills, ater taking delivery, and after 30/45/60 days have passed, the buyer may not pay on due date. For D/P bills, if the buyer does not pay the bank, he does not get the goods - EXCEPT under one condition. In air transportation the consignee does not always have to produce the CN. So, take care here.
(5) Otherwise, for D/P bills the risk is that IF the documents remain unpaid, the seller would have to find an alternate buyer or re-ship the goods back to his country at his own expense, demurrage costs, and possible deterioration in quality.
Friend "Allenscafe" is mostly correct. He said: "I think it is D/P not DAP.a term of payment, right? It's not safe for the seller. you send the goods in advance, and send the document to their bank.
If it is D/P at sight. your customer need pay the money to the bank at once then he can get the document and clean the goods. and the bank will remit the money to you."
Only a few additional comments:
(1) DAP and D/P are the same, both meaning Documents (Against) Payment.
(2) DAP (i.e. * bills) are always SIGHT bills.
(3) Only D/A (Documents against Acceptance) bills are payable after a delay, NOT D/P bills.
(4) D/P bils are relatively safer than D/A bills. For DA bills, ater taking delivery, and after 30/45/60 days have passed, the buyer may not pay on due date. For D/P bills, if the buyer does not pay the bank, he does not get the goods - EXCEPT under one condition. In air transportation the consignee does not always have to produce the CN. So, take care here.
(5) Otherwise, for D/P bills the risk is that IF the documents remain unpaid, the seller would have to find an alternate buyer or re-ship the goods back to his country at his own expense, demurrage costs, and possible deterioration in quality.
23 Aug 2007 05:43
Post 5 of 8
Replying to [adimanu]:
Nowaday, there is new term called "D/P term". The concept is exactly the same to the traditional D/P Sight, which the exporter must get paid before the importer can take shipping documents from the importer's bank. The one who pays the exporter, however, is not the importer, but the importer's bank. This is the big difference between "Sight" and "Term", whereas D/P Sight the importer must pay the bills by himself. In order to do so, the importer must ask for import credit line from his bank at first. Once the importer's bank advance money to exporter, the importer will be charged "Engagement Fee" for number of days stated in the term of D/P.
Nowaday, there is new term called "D/P term". The concept is exactly the same to the traditional D/P Sight, which the exporter must get paid before the importer can take shipping documents from the importer's bank. The one who pays the exporter, however, is not the importer, but the importer's bank. This is the big difference between "Sight" and "Term", whereas D/P Sight the importer must pay the bills by himself. In order to do so, the importer must ask for import credit line from his bank at first. Once the importer's bank advance money to exporter, the importer will be charged "Engagement Fee" for number of days stated in the term of D/P.
10 Oct 2007 02:31
Post 6 of 8
Replying to [kcus]:
The explanation is incorrect. There is NO difference between D/P "term and "sight". The 'arrangement' between the buyer and the seller is what 'term' refers to. 'Sight' simply means the buyer must pay 'on demand', i.e. 'at sight' (not 'after sight' which applies to D/A terms payments).
Whether the buyer takes a OD to pay for his import bill or arranges his own funds depends on him and his bank. It has nothing to do with the contract for payment (D/P, D/A, LC etc.) that's agreed between the buyer and the seller.
The explanation is incorrect. There is NO difference between D/P "term and "sight". The 'arrangement' between the buyer and the seller is what 'term' refers to. 'Sight' simply means the buyer must pay 'on demand', i.e. 'at sight' (not 'after sight' which applies to D/A terms payments).
Whether the buyer takes a OD to pay for his import bill or arranges his own funds depends on him and his bank. It has nothing to do with the contract for payment (D/P, D/A, LC etc.) that's agreed between the buyer and the seller.
10 Oct 2007 06:48
Post 7 of 8
Replying to [Catalyst]:
Sorry, I don't want to break your comment before.
What I mentioned about D/P term is what I saw from the real purchase order and confirmed this concept with banks.
Please check from another sources to re-confirm this.
Kind Regards
Sorry, I don't want to break your comment before.
What I mentioned about D/P term is what I saw from the real purchase order and confirmed this concept with banks.
Please check from another sources to re-confirm this.
Kind Regards
25 Oct 2007 23:13
Post 8 of 8
Replying to [kcus]:
The distinctions remain as explained earlier. if the importer's bank wants to pay for the import, allowing the actual importer to pay after some period of time, it is being done under "import finance" schemes of the importer's bank. Pl also do have a look at "Buyer's Credit" arrangements offered by banks - at the behest of the exporter, or arranged direct by the importer himself. These are similar arrangements for extending finance to importers.
Banks and financial institutions extend such financial facilities frequently.
The distinctions remain as explained earlier. if the importer's bank wants to pay for the import, allowing the actual importer to pay after some period of time, it is being done under "import finance" schemes of the importer's bank. Pl also do have a look at "Buyer's Credit" arrangements offered by banks - at the behest of the exporter, or arranged direct by the importer himself. These are similar arrangements for extending finance to importers.
Banks and financial institutions extend such financial facilities frequently.
27 Oct 2007 00:24
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