What should you include when thinking about how to finance your international transaction?

Let’s take some time to create a checklist for you to understand the time scales and cash flow implications of an export order. We can then use this to calculate the time and amount of money we may need to finance to be able to fulfil this order. 


Considerations for cash flow and possible trade finance 

No. days


How many days did you allow for the validity of the quote that you offered?


How long will it take you to buy and get delivered the product or how long to get the raw materials or to manufacture, bake or produce?


What are the production timescales for fulfilling this order – do you need to add overtime?


Getting the goods ready to ship includes packing in suitable shipping cartons and preparing the paperwork for export, how long will that take? 

Do you need specialist certificates or tests?

For some countries, you need to get a certificate legalised by the embassy in London


Booking the freight is an important part of the planning as sometimes, especially when shipping by sea, the time you book the freight is not the same start time as the cargo moving. Ie. Ships to Mauritius may only sail once every 15 days this is an important part of the cash flow that may add days. 


Once on the transport how long is it going to take to reach the agreed destination and how long before the goods can be delivered?


Add the agreed payment terms ie 60 days from date of invoice or date of shipping etc 


Most importantly add a contingency of a few days depending on the type of market you are working with as not only does everything take longer than you think, sometimes delays or acts of God halt the delivery schedule. 


Stages 1-7 will give you a date to take to the bank to ask for an exchange rate at which they will buy the currency you will get paid which will enable you to quote in a foreign currency. 

Stages 2-7 will tell you and possibly your bank how long your finances will be exposed until you get paid. Remember – an international order will take longer to fulfil due to transit time and payment takes longer too – good luck!


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