International Supplier Payments

An international vendor payment–or international supplier payment–is when a foreign company pays an international vendor for purchased goods. By tapping into a global network of suppliers and vendors, you can access goods that may be cheaper or not available in your country, thereby saving costs that boosts your company’s profitability.

But transferring funds to a supplier in a different currency isn’t as straightforward as paying a local vendor from your corporate bank account. Your corporate bank may not offer the cheapest and most efficient option. If you regularly purchase goods and services from abroad, you’ll need to know how to pay overseas suppliers and choose the best option for your business and the risks involved.

There is an element of risk in paying overseas suppliers, as it can take several days to transfer funds, and there is a possibility that you may not receive the goods. While overseas suppliers may prefer advance payment, open account trading allows buyers to receive the goods and then pay within an agreed period. Another way to balance the risk is to use a letter of credit by using banks as intermediaries.

Paying international invoices will incur extra costs compared with domestic invoices due to exchange rate fluctuations, currency conversion fees and transfer charges. You’ll need to factor these charges in when calculating the cost of your goods.

Federal Clearing can facilitate your international supplier payment on your behalf in any currency. We offer specialist international wire transfer, which allows us to offer lower fees and faster transactions. When we book a payment on your behalf, the rate of exchange is set, which allows you to know what exact ZAR amount the goods will cost your company.

If you have an account with us, your supplier payment can be placed on credit terms, which increases your business cash flow.

Federal Clearing, as your trade partner will have on-hand the required documentation to facilitate the payment and acquit the documents with the South African reserve bank (SARB).

Documentary evidence:

• Commercial Invoice
• SAD500 with MRN
• Transport Document

Customs issue MRN on the SARS customs import declaration form in respect of goods imported into the Republic of South Africa. All transactions related to an import transaction must be reported with either an invoice or MRN number.

Where an MRN is not available and customs do not clear the goods, the invoice number must be submitted starting with the prefix INV.