In international trade, T/T 30 days and D/A 30 days are standard payment methods, but their benefits to the seller differ.
Sellers can receive payments faster to maintain their liquidity and operations. T/T 30 days mean the buyer pays within 30 days of receiving the goods. This method is relatively beneficial to the seller because the buyer must pay immediately after receiving the goods.
D/A 30 days mean the buyer can pay after receiving the acceptance document within 30 days. This is beneficial to the buyer as they have a longer time to raise funds after delivery, but not to the seller as the seller has to wait for the buyer to receive the goods and the document of acceptance before receiving payment. If the buyer cannot honor the record, the seller may risk not receiving pay.Therefore, T/T 30 days are more beneficial to the seller because it can guarantee the seller receives the money quickly, and the risk is lower. However, it also depends on the creditworthiness and financial situation of the buyer. D/A 30 days may also be a better choice for the seller if the buyer has high creditworthiness and can pay promptly, providing the buyer with more flexibility and convenience because at least the buyer needs to go to his correspondent bank to make a "guaranteed payment acceptance bill" after 30 days and have the minimum performance documents. If the other party fails to pay by then:
- At least he will have a bad credit record in his bank (the bad credit record will affect the buyer's rejection of any bank loans in the future).
- Due to the process mentioned above and the provision of relevant documents and certificates, there is sufficient evidence when a trade dispute arises in arbitration or resort to law.
