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Paying the right amount, at the right time, is the key to success.
Lackom Global provide you Financial and legal follow up for the payment terms according to your deals with manufacturers in Turkey.
The payment method, and the process, often have a major impact on the outcome. In fact, it can spell the difference between success and failure, when buying from overseas suppliers. In Lackom Global, we guide you to the right financial decision during import from Turkey.
In TURKEY generally standard payment term is a deposit payment of 30% upfront, before manufacturing, and balance payment upon completion – but before shipping (or at least, before the original Bill of Lading is issued).
The timing of when, and under which conditions, you are making this second and final, payment, is crucial.
It’s all about giving the supplier an incentive to comply with your requirements. By paying the supplier in full, before regulatory compliance and quality have been verified, you take that incentive away. Thus, the balance payment must be withheld until after the batch has been approved by a quality inspector.
Lakcom Global will be your inspector in Turkey, and the balance of payment will be paid after the final test results return when the goods are in conformity with the specifications.
Letter of Credit (L/C)
Letter of Credit enables the buyer to add an extra layer of security, by forcing the supplier to fulfill certain, pre-determined, requirements before the funds are transferred. The key point here is that no deposit payment is required, which vastly reduces the risks on the buyer’s side.
Lakcom Global follows up all L/C payment process one by one as below:
1. The seller and buyer sign a Sale Agreement that states the conditions that must be fulfilled before the payment shall be released
2. The buyer contacts its local bank and applies for an L/C
3. The buyer’s bank contacts the seller’s bank (in TURKEY) and presents the Letter of Credit
4. The seller’s bank contacts the seller and presents a payment advice
5. Production starts
6. Production completed
7. Quality Inspection & Product Testing (Lakcom’s inspector)
8. Delivery to the Port of Loading and Shipment
9. The provides the required documentation to their local bank (Quality Inspection Report, Test Report and Freight Documents)
10. The funds are released, if the conditions are fulfilled.