Payment Terms Impact Calculator — 30/60/90 Days Effect
Use our payment terms impact calculator to calculate the cash flow impact of different payment terms with Chinese suppliers: 30% deposit vs 70% before shipment vs 30/70 split.
Based on typical bank transfer fees, published LC fee schedules, and benchmark FX spread data.
Bank fees and FX rates change daily. Confirm actual charges with your bank or payment provider before transacting.
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Cash Flow Impact of Supplier Terms
Negotiating your payment terms is just as important as negotiating the unit price. Moving from "100% Upfront" to "30% Deposit / 70% Upon Bill of Lading" dramatically alters your working capital cycle.
By delaying the 70% balance payment until after the final factory inspection, you retain maximum leverage to demand that the factory fix defects before the goods leave Shenzhen.
Tips for China Importers
- Never pay 100% upfront to a new supplier. The global standard for China B2B is 30% deposit, 70% before shipment (or against Bill of Lading copy). Full upfront payment removes all your negotiating leverage.
- Use Alibaba Trade Assurance for first orders. It adds supplier accountability and dispute resolution at no extra cost to you. Only remove it once you have 3–5 successful orders with a supplier.
- Factor FX risk into your cost model. CNY/USD rates can move 3–8% in a year. A 5% FX move on a $50,000 order is $2,500. Consider forward contracts or timing purchases around FX movements.
- Calculate the true APR of your supplier payment terms. A 2% discount for early payment (e.g., 2/10 net 30) equates to ~36% APR. If your credit line costs less, take the discount every time.
- Match your payment timing to your cash flow cycle. If you pay your supplier before the goods arrive and you have 30-day customer terms, you may be financing 75+ days of inventory. Model your cash conversion cycle.