If you pursue whole portfolio coverage, you would normally exclude sales made on letter-of-credit terms and possibly sales made against sight and time drafts
, especially if you plan to forfait your time drafts
The difference between the two is that under a time draft
, the customer simply signs the draft promising to return to the bank at a specified date in the future and pay for the shipment.
A more practical approach is to time drafts
and their reviews to reasonable but somewhat arbitrary feature-freeze dates.
One of the cheapest methods of payment is to sell on an open-account basis: The exporter sends shipping documents directly to the importer who pays the exporter, either upon arrival of the goods documents against payment (D/P), or on an agreed date thereafter - documents against acceptance of time drafts