The
Definition Of

Prepayment

Prepayment is paying for goods at the time the order is placed and prior to receipt of the goods.

When prepaying, the importer carries all the risk. They are placing implicit faith in the supplier to fulfil the terms of the contract.

Share it:

More from this Section

  • UCPDC
    UCPDC ‘Uniform Customs and Practice for Documentary Credit’ developed by the International Chamber of Commerce as the rules
  • American selling price (ASP)
    American selling price (ASP)— for customer purposes, the use of the domestic price of competing merchandise in the United States as a tax base for ...
  • Types of business transactions dominate the balance of payments
    Two types of business transactions dominate the balance of payments: Exchange of Real Assets: The exchange of goods (for example: automobiles ...
  • Hedge Ratio
    Hedge Ratio refers to the percentage of an individual exposure’s nominal amount covered by a financial instrument such as forward contract or currency option.
  • Shading
    Shading is a request to narrow, or close up, the spread or margin between foreign currency buying and selling rates of exchange.
  • Foreign Corrupt Practices Act of 1977
    Foreign Corrupt Practices Act of 1977 refers to a U.S. law that punishes companies and their executives if they pay bribes or make other improper payments to foreigners.
  • Westpac Banking Corporation
    Westpac Banking Corporation is Australia’s First Bank, committed to providing customers with solution focussed, reliable and easy to