1. PAYMENT
SUPPLIER CUSTOMER
Invoice
Pro Forma Invoice
Statement of Account
Advice of Payment
Acknowledgment of
Payment
Delayed Payment
Agreeing to the
customer’s request
Offering a compromise
Refuse to the customer’s
request
Request for Payment
1
2
3

2. PAYMENT
• Invoice
The main documents used in trading to record payment and transactions
which give the buyer and seller information about what has been bought or
sold, the terms of the sale, and details of the transactions
• Pro Forma Invoice
-if the customer has to pre-pay (pay for goods before receiving them), they
pay against the pro forma
-If the customer wants to make sure a quotation will not be changed, the
pro forma will say exactly what and how they will be charged
-If goods are sent on approval, on sale or return, or on consignment to an
agent who will sell them on behalf of the principal
-As a customs document
• Statement of Account
-At the end of the period, a Statement of Account is sent to customer, giving
details of all the transactions between the buyer and seller for the period.
-It includes BALANCE on the account, which is forward from the previous
period and listed as account rendered

3. METHODS OF PAYMENT
 Bank draft
 Bank transfer
 Bill of exchange
 Cheque
 Credit transfer
 Debit/credit card payment
 Letter of credit
 Cash on delivery
 Post Office Giro
 Postal Order
 Documentary credit
 International bank draft
 International money order
 International Post Office Giro
 Promissory Note

4. LET’S FIND OUT !
• Bank Draft
The customer buy a cheque from the bank for the
amount he or she wants to pay and sends it to the
supplier.
A type of check where the payment is guaranteed to be
available by issuing bank. Typically, banks will review
the bank draft requester's account to see if sufficient
funds are available for the check to clear. Once it has
been confirmed that sufficient funds are available, the
bank effectively sets aside the funds from the person's
account to be given out when the bank draft is used.

5. Sample

6. • Bank Transfer
A bank moves money by order from one account to
another

7. • Bill of Exchange (B/E)
It states that the customer will pay the supplier an
amount within a stated time. The bill is sent direct
to the customer or paid through a bank. If the bill is
a SIGHT DRAFT, the customer will pay immediately.
If the bill is a TERM DRAFT, the customer signs
(accepts) the bill before the goods are sent and pays
later
Or
(the procedure is the same as that above), but
shipping documents usually accompany bills when
the bank acts as an intermediary in international
transactions

8. Sample

9. • Cheque
A cheque (or check) is a document that orders a
payment of money from a bank account. The person
writing the cheque, the drawer, usually has a current
account or chequing/checking account where their
money was previously deposited. The drawer writes
the various details including the monetary amount,
date, and a payee on the cheque, and signs it,
ordering their bank, known as the drawee, to pay that
person or company the amount of money stated.

10. Sample

11. • Credit Transfer
The customer fills out a bank GIRO slip and hands it
to a bank. The bank then transfers the money to the
supplier

12. • Debit/Credit Card Payment
It can be made either direct on the phone or on the
Internet

13. • Letter of Credit (L/C)
A letter of credit is a document issued by a financial institution, or a
similar party, assuring payment to a seller of goods and/or services
provided certain documents have been presented to the bank. These
are documents that prove that the seller has performed the duties
under an underlying contract (e.g., sale of goods contract) and the
goods (or services) have been supplied as agreed. In return for these
documents, the beneficiary receives payment from the financial
institution that issued the letter of credit. The letter of credit serves as a
guarantee to the seller that it will be paid regardless of whether the
buyer ultimately fails to pay. In this way, the risk that the buyer will fail
to pay is transferred from the seller to the letter of credit's issuer. The
letter of credit can also be used to ensure that all the agreed upon
standards and quality of goods are met by the supplier, provided that
these requirements are reflected in the documents described in the
letter of credit.

14. Sample

15. • Cash On Delivery
Payment is made when goods have been delivered
(or) It is a service by the Post Office. They will
deliver goods and accept payment on behalf of the
supplier

16. • Post Office Giro
It allows a customer to send a payment to a
supplier, whether they have a Post Office Giro
account or not

17. • Postal Order
It can be bought from the Post Office, usually to pay
small amounts, and send to the supplier direct. It
can either be crossed , in which case the money can
only be paid into the supplier’s account, or left
open for the supplier to cash

18. • Documentary Credit
When a letter of credit is accompanied by shipping
documents, it is called a DOCUMENTARY CREDIT.
The money is credited to the supplier’s account as
soon as confirmation of shipment is made

19. • International Bank draft
It is a cheque which a bank draws on itself and sells
to the customer, who then sends it to the supplier.
The supplier’s bank should usually have either an
account or an agreement with the customer’s bank

20. • International Money Order (IMO)
They can be bought at most banks. The bank fills
out the order for the customer then, for a small
charge, hands the IMO over, and the buyer sends it
to the supplier. IMOs can be either cashed or
credited to the supplier’s account

21. • International Post Office Giro
It can be made when either the customer or
supplier, or both, do not have bank accounts. An
order for the amount to be paid is filled out at a
Post Office, which forwards it to the Giro Centre.
The Giro Centre will send the amount to a post
Office in the supplier’s country, where the supplier
will receive a postal cheque. They can then either
cash it, or pay it into a bank acount.

22. • Promissory Note
It is written promise from a customer to a supplier
that the former will pay the amount stated, either
on demand or after a certain date.

23. PT MAPHILINDO RAYA
Jln. Panarukan Baru No. 29 Banjarmasin 2002
Kalimantan Selatan
Your Ref: AR/NA/2B 15th September, 1993
Our Ref:SM/FA/12
Mr. Martin S. Wenger
Accounting Manger
New International Paint Company
21 Jln. Pajajaran Raya Semarang 12020
Jawa Tengah
Dear Mr. Martin,
Subject: Invoice No. 287/DC
We have received your letter of 8 September and enclosed invoice No. 287/DC.
We have instructed our bank to remit the sum of US$ 19,980 for the credit of your account at
Bank Panca Niaga Semarang.
Please send us your official receipt for this settlement.
Yours sincerely,
Surya M. Kasman
Surya M. Kasman
Accounts Manager
Enc: 1
ADVICE OF PAYMENT

24. NEW INTERNATIONAL PAINT COMPANY
Jln. Pajajaran Raya No. 21 Semarang 1020
Jawa Tengah
Your Ref: SM/FA/2C 25th September, 1993
Our Ref:MS/T/2C
Mr. Surya M. Kasman
Accounts Manager
PT. Maphilindo Raya
29 Jln. Panarukan Baru Banjarmasin 2002
Kalimantan Selatan
Dear Mr. Surya,
Subject: Invoice No. 287/DC
Thank you for your letter of 15 September advising that you have made a credit transfer to our account
at Bank Panca Niaga Semarang.
Our bank has also advised us that they have received the transfer you made.
We thank you for your prompt settlement of the account and enclose our official receipt.
Yours sincerely,
Martin S. Wenger
Martin S. Wenger
Accounts Manager
Enc: 1
ACKNOWLEDGEMENT OF PAYMENT

25. Dear Herr Schubert,
I am sorry that we were not able to clear your
November statement for $5,850 and December
invoice, No. 7713 for $1,289. We had intended to
pay the statement as usual, but a large cash
shipment to one of our customers in Australia was
part of the cargo destroyed in the fire on the Tippa
when she docked in Bombay in late November.
Our insurance company have promised us
compensation within the next few weeks. Once we
have received this, the account will be paid in full.
We feel confident that you will appreciate the
situation and hope you can bear with us until the
matter is settled.
Your sincerely,
D. Van Basten
D. Van Basten (Ms)
Director
Ask for apology
Give a precise date
of payment
Explain the reason
Closing

26. Dear Ms Van Basten,
Thank you for your letter of 15 January regarding
our November statement and December invoice
No. 7713.
We were sorry to hear about the difficulties you
have had, and understand the situation. However,
we would appreciate it if you could clear the
account as soon as possible, as we ourselves have
suppliers to pay.
We look forward to hearing from you soon
Your sincerely,
Dieter Schubert
Dieter Schubert
Director

27. Dear Ms Van Basten,
Thank you for your letter explaining why you
cannot clear your November statement for $5,850
and December invoice No. 7713 for $1,289.
I appreciate your difficulty, but we ourselves have
to pay our own suppliers and therefore must insist
on payment within the next ten days.
We look forward to receiving your remittance.
Your sincerely,
Dieter Schubert
Dieter Schubert
Director

28. Dear Mr. Franksen,
Bill No. B/E 7714
I was sorry to learn about the embargo your government has placed on exports to
Zurimba and of the problems this has created. However, the above bill already
allows credit for 40 days, and although I appreciate your offer of an additional 6%
interest on the outstanding $35,498.00, it is impossible for me to allow a further 60
days’ credit as I myself have commitments.
I think the following solution might help us both.
You need not add interest on the present amount, but I have enclosed a new draft
(B/E 7731) for $17,749.00, which is half of the outstanding balance, and will allow
you 40 days to pay it. But I expect you to pay the remaining $17,749.00 by banker’s
draft.
Please confirm your acceptance by signing the enclosed bill and sending it to me
with your draft by return of post.
I hope that your negotiations with the Brazilian importers have a positive outcome
and trust that this setback will soon be resolved.
Your sincerely,
N. Bhiskin
N. Bhiskin (Mr)
Director
Enc.Bill B/E 7731
Offering a Compromise

29. REQUEST FOR PAYMENT

30. BAVARIA MUSICAL MANUFACTURER
Jln. Cemani Raya Dua No. 25 Bogor 20019
Jawa Barat
Ref: RP/DG/13 25th July, 1993
Mr. Alwin B. Tando
Chief Accountant
PT. Mahkota Raya Abadi
21 Jln. Mahkota Raya Ujung Pandang 1007
Sulawesi Selatan
Dear Mr. Alwin,
Subject: Statement-May 1993
We regret having to remind you that we have not received payment of the balance of Rp 15,500,000 due on our
statement for May, sent to you on 15 June.
We enclose a copy of the statement and would remind you that we quoted unusually low prices on the goods you
ordered.
We look forward to your remittance by return.
Yours sincerely,
Rahardian P. Ramlan
Rahadian P. Ramlan
Accounts Manager
Encl:1
Reminding the payment
Stating the enclosure of the
invoice/pro forma invoice/
statement of accountExpecting the settlement
First Request

31. BAVARIA MUSICAL MANUFACTURER
Jln. Cemani Raya Dua No. 25 Bogor 20019
Jawa Barat
Ref: RP/DG/13 1st August, 1993
Mr. Alwin B. Tando
Chief Accountant
PT. Mahkota Raya Abadi
21 Jln. Mahkota Raya Ujung Pandang 1007
Sulawesi Selatan
Dear Mr. Alwin,
Subject: Statement-May 1993
We regret having to remind you again that on 25 July we wrote reminding you that on 15 June we sent you our
statement for May, showing a balance of Rp 15,500,000 is still outstanding.
As settlement of this account is now more than two months overdue, we must ask you to send your remittance within
the next few days, or at least you can give us an explanation of the delay in making payment.
We hope it will not be necessary to send you any further reminder.
Yours sincerely,
Rahardian P. Ramlan
Rahadian P. Ramlan
Accounts Manager
Second Request
Mentioning the previous
correspondence and
including any relevant
invoice/statementInsisting the settlement
Closing

32. BAVARIA MUSICAL MANUFACTURER
Jln. Cemani Raya Dua No. 25 Bogor 20019
Jawa Barat
Ref: RP/DG/13 21st September, 1993
Mr. Alwin B. Tando
Chief Accountant
PT. Mahkota Raya Abadi
21 Jln. Mahkota Raya Ujung Pandang 1007
Sulawesi Selatan
Dear Mr. Alwin,
Subject: Statement-May 1993
We have reminded you twice and it is still very difficult to understand why we have not heard from you any reply to our two
previous letters about the sum of Rp 15,500,000 due on May statement.
We are sure you will agree that we have shown you every consideration and now, you will understand that we cannot wait
indefinitely for settlement.
If payment is still not made within fourteen days, we shall instruct our solicitor to recover the amount outstanding
Yours sincerely,
Rahardian P. Ramlan
Rahadian P. Ramlan
Accounts Manager
Third Request/
Final Demand
Reviewing the situation from
the time account should have
been paid.
Explaining that you have been
patient
Legal action is threatened