One of the most important international trade considerations is how you are going to get paid for your exports. While relying on cash up front may eliminate the risk of non-payment, it limits your universe of potential customers since it can cause cash flow and other problems for the buyers.
There are five primary methods of payment in international trade that range from most to least secure. Of course, the most secure method for the exporter is the least secure method for the importer and vice versa. They key is striking the right balance for both sides. This article focuses on letters of credit.