Define what “later” means
A supplier asks for “30% now, 70% later.” Before agreeing, pin down the second date. Does the balance become due when production is complete, an inspection passes, the cargo is handed over or the documents arrive? Name the event, the evidence you will accept and the person authorized to approve payment.
The 30/70 split is an example here, not a claim about standard market terms. Before sending the deposit, align the purchase order, product specification and supplier invoice. Confirm that the recipient is the contracted supplier, or document and verify the reason for paying a different entity.
Put the conditions in the sales agreement
Advance payment puts funding and performance risk on the buyer. The International Trade Administration describes it as attractive to exporters and less attractive to importers. Paying a smaller amount first does not, by itself, establish an inspection right or a refund mechanism.
Incoterms rules deal with delivery responsibilities, costs and risk. They do not set the payment method or transfer of ownership. Write the payment milestones and any remedies into the sales agreement, and have the relevant professionals review provisions you need to rely on—especially with a new supplier or a larger order.
Prepare the balance-payment file
Collect the evidence before the request for the balance arrives. The file should let the approver check the agreed conditions without reconstructing the order from email.
- The approved order and agreed product specification.
- The inspection result, if inspection is a release condition.
- The revised invoice and verified beneficiary details.
- The named payment approver.
When the balance is requested
Decide in advance how a failed inspection or a changed cargo-ready date affects release. When payment is requested, operations should confirm which conditions have been met; finance should confirm the funds, currency and transfer cutoff. Keep any unresolved exception visible to the approver.