International supplier payment terms: questions for Nigerian businesses

Write down when payment becomes due

An overseas order can require funds before production, before dispatch, against documents or after an agreed credit period. For a Nigerian business, the important starting point is an exact schedule showing the amount, currency, due event and evidence required at each stage.

Avoid undefined milestones such as pay when ready. Ready can mean production completed, inspection passed, goods packed or a transport booking made. Ask both sides to use the same definition and explain what happens if the event is disputed or delayed.

Different payment arrangements address different risks

Advance payment changes the seller's exposure to non-payment but leaves the buyer needing confidence in performance. A letter of credit introduces bank obligations subject to its terms and documentary requirements. It should not be assumed to confirm that the goods meet your specification.

The US International Trade Administration's guide is a useful general explanation of payment methods, not Nigerian banking eligibility or legal advice. Ask your authorised Nigerian bank what arrangements it can provide, what documentation it requires and how charges and exceptions work for the actual transaction.

Check documentary conditions before accepting them

If payment depends on documents, identify who issues them, what information must agree and when they must be presented. Ask how discrepancies, amendments or late presentation are handled. A document condition that cannot be fulfilled reliably can cause a dispute even when a shipment has moved.

Review the sales agreement and proposed bank terms together with the appropriate professionals. Keep quality inspection and contractual remedies visible rather than assuming a documentary arrangement settles them. Do not copy a payment clause from another product or destination without checking its applicability.

• Payment currency and each milestone amount
• Required documents and issuing parties
• Presentation dates and discrepancy handling
• Bank, intermediary and amendment charges
• Quality acceptance and defect remedies
• Cancellation, delay and dispute conditions

Distinguish the amount sent from the amount received

Ask whether fees are paid separately, deducted before conversion or deducted from the recipient's funds. If an invoice requires a particular net receipt, a transfer of that gross amount may not settle it after charges. Obtain the provider's written quote and keep the fee basis with it.

Illustration only: if a supplier must receive USD 1,000 and an entered receiving-currency fee is USD 20, sending USD 1,000 before that deduction would leave USD 980. The actual provider's fee arrangement may differ. Do not use this example to infer a standard transfer charge.

Verify beneficiary changes independently

Treat a change of bank details or receiving entity as a new verification event. Use a contact route established before the change, reconcile the beneficiary with the contracting party and ask the bank about unresolved inconsistencies. Urgency in a message does not replace those checks.

Use the currency tool to understand the provider's quoted direction and entered fee arithmetic. It cannot decide which payment method suits your business or guarantee delivery, compliance or recovery. Retain the agreement, bank instructions, quote and receipts in your private records.