Best Practice
(Global purchasing)

Supplier from China

Spare parts imported from Shanghai, CN

Buying: EUR 100'000

Payment terms: 3/10 or 30 days net

Transport mode: Sea

Duration: 40 days

Selling: EUR 120'000

Payment terms: 30 days net

As an importer, you have three options to pay your supplier invoice:

(1) You pay the invoice without an early payment discount after 30 days

(2) You pay the invoice with an early payment discount of 3 % after 10 days

(3) You use our purchase financing solution and extend your payment terms by 60 days with a supplier payment through us after 10 days

Scenario Supplier payment Fee* Payment to Tradico Payment from customer Negative Cash Flow Profit
(1)EUR 100'000
(Day 30)
EUR 0EUR 0EUR 120'000
(Day 70)
EUR 100'000
(40 days)
EUR 20'000
(2)EUR 97'000
(Day 10)
EUR 0EUR 0EUR 120'000
(Day 70)
EUR 97'000
(60 days)
EUR 23'000
(3)EUR 97'000
(Day 10)
EUR 1'940EUR 98'940
(Day 70)
EUR 120'000
(Day 70)
No negative Cash FlowEUR 21'060

* In this example: Financing rate 1 % for every 30 days (based on individual credit rating)

Compared to the first option (1), the payment period was extended by 40 days and the profit increased by EUR 1'060. In addition, no bridging loan of EUR 100'000 is required for 40 days.

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