finance account banks business banker acceptance open account international financial management slide Factoring Forfeiting counter trade Definition example method of settling payment for trade transactions 2014 Barter.Counter-purchase.Buyback.

1. Bankers Acceptance, Open Account
&
Factoring Forfeiting countertrade
Aminuddin Hakim Bin Mohd Taib

2. Bankers Acceptance
Definition – negotiable instrument or time
draft drawn on and accepted by a bank.
Before acceptance the draft is not an obligation of the bank it is merely an
order by the drawer to the bank to pay a specified sum of money on a
specific date to a named person or to the bearer of the draft.
Upon acceptance the draft becomes liability of the bank, The company’s
bank stamps the Note “Accepted” and charges the company a stamping
fee

3. Bankers Acceptance
Purpose
• Orders to a bank by a customer to pay a given sum at a given date.
•Backed by bank.
.
•Widely used in international commerce, business transaction,
because the creditworthiness is supplied by a bank.

4. Bankers Acceptance Example

5. Open Account
Definition
• Also known as unsettled account/credit account
•An account with a balance that has not been ascertained, that
is kept open in anticipation of future transactions
• An open account has no credit limit and you have to pay
back the full amount at the end of each month. Your payment
will vary depending on how much of a balance you run up
each month.
•Need recommendation to open.

6. • This is a method of settling payment for trade
transactions.
•The supplier ships required goods to the buyer who, after
receiving and checking the related shipping documents,
credits the supplier's account in their books with the invoice
amount.
•The account is then settled periodically, say monthly, by
the buyer sending a bank draft, or arranging through their
bank an airmail or telegraphic remittance in favour of the
exporter.

7. 
define as : A financing method in which a
business owner sells accounts receivable
at a discount to a third-party funding
source to raise capital.

8. 
assume a factor has agreed to purchase an
invoice of RM 1 million from Clothing
Manufacturers Inc., representing outstanding
receivables from Behemoth Co. The factor may
discount the invoice by say 4%, and will advance
RM720,000 to Clothing Manufacturers Inc. The
balance of RM240,000 will be forwarded by the
factor to Clothing Manufacturers Inc. upon
receipt of the RM1 million from Behemoth Co.
The factor's fees and commissions from this
factoring deal amount to RM40,000.

9. 


To obtain cash.
Made money available for investment in
the firm’s growth.
Improved cash flow : Receivables become
current cash in flow and its is beneficial
to the exporters to improve financial
status and liquidation ability so as to
heighten further the funds raising
capability.

10. 

defined as the purchasing of an exporter’s
receivables at a discount price by paying
cash. By buying these receivables, the
forfeiter frees the exporter from credit and
the risk of not receiving the payment from
the importer.
In forfaiting, receivables are normally
guaranteed by the importer’s bank, allowing
the exporter to take the transaction off the
balance sheet to enhance its key financial
ratios. Forfeiting typically requires a bank
guarantee for the foreign buyer.

11. 
Counter trade is an import / export
relationship between nations or large
companies in which good and/or services
are exchanged for goods and services
instead of money.
There are 3 types of countertrade :
I. Barter.
II. Counter-purchase.
III.Buyback.


12. Barter.
-It
is the exchange of goods and services for
goods and services without any use of money.
For example, Malaysia might swap palm oil for
steel from another country, say Germany.
Counter-purchase.
- In this, a foreign company, or country,
trades with a nation with the promise that in
the future they will make purchase of a
specific product from the nation. A recent
example of this is the on going trade between
Congo and China where infrastructure is being
traded for a supply of metals.

13. Buyback.
- A buyback arrangement involves the
repayment of the original price through the
sale of a related product. For example,
Malaysia producer of palm oil sells palm oil in
return to buy the products made using the
palm oil bought from the explorer.

14. 1. Money.
2. Competitive advantage.
3. Balance of trade.