Home»Trade Essentials» How does an agency company receive payment for exports? What are the payment settlement methods? How to avoid foreign exchange collection risks?
When signing the agency agreement, it is recommended to focus on the following:Exchange rate conversion rulesandFund settlement cycleTerms. A certain electromechanical export enterprise incurred a foreign exchange loss of $37,000 in 2024 due to neglecting the exchange rate locking clause.
Currently, international trade primarily employs five major settlement methods:
T/T Telegraphic Transfer(58% share, applicable to existing customers)
L/C Letter of Credit(23% share, preferred choice for large orders)
DP payment against documents(12% share, commonly used in emerging markets)
OA credit sales(5% of the total, credit insurance required)
Cross - border RMB(Accounting for 2%, hedging against exchange rate risks)
Recommended for priority use in 2025TT and LC combined paymentA textile company adopted a payment combination of 30% TT in advance plus 70% LC, reducing its bad debt ratio from 7% to 1.2%.
How to prevent exchange rate risks in the process of receiving payments?
To cope with exchange rate fluctuations, it is necessary to establishA three - level defense system:
Prevention in advance:
Signing an exchange rate hedging clause
Opt for cross-border RMB settlement
In-process control:
Use forward contractsFX Settlement Agency(Lock in the exchange rate for 3-6 months)
Set an exchange rate fluctuation alert threshold (recommended ±3%).
Post-event remediation:
Apply for foreign exchange derivatives
Adjust pricing for subsequent orders
A certainAutomotive partsThe exporter passes throughForward settlement + option combination, reducing losses by 860,000 yuan during the RMB fluctuation period in 2024.
How to Ensure Fund Safety in Agency Export?
Key Points for Financial Security Prevention and Control:
Conduct strict credit checks on buyers (Dun & Bradstreet ratings are recommended).
The requirement is that the advance payment ratio should not be less than 30%.
Establish a dedicated regulatory account (to prevent commingling of funds)
Real-time tracking of logistics documents (blockchain-based evidence storage is recommended)
New regulations in 2025 require agencies to provideFund Flow Detailed List, a food export company successfully recovered a misdirected payment of 420,000 yuan.
What should I do if I encounter foreign exchange controls?
A three-step strategy for coping with regulatory measures:
Confirm the legality of the foreign exchange receipt path in advance (consult the local SAFE).
For special markets such as Iran, it is recommended to useBarter tradeorTransshipment via third countries.A certainMedical EquipmentThe company successfully recovered $3.8 million in payments from Iran through Dubai's re-export.
Frequently Asked Questions
Q: Will the agency withhold the tax refund?
A: All formal agents operate in accordance with Announcement No. 17 of 2024 from the State Taxation Administration, and the tax refund must be paid within 5 working days after the funds are received.
Q: How to charge small orders cost-effectively?
A: It is recommended to choose the bundled price (starting from 2000 RMB per shipment), which includes the entire process of customs declaration, documentation, and foreign exchange collection.
Q: What should I do if there is a delay in the arrival of funds?
A: According to the claim terms of the agency agreement, late payment fees (daily interest of 0.05%) may be charged if the payment exceeds the agreed deadline.