In a quote comparison, the payment term is usually the last line; yet it has a more lasting effect on cash flow, risk and the tone of the relationship than the price. This article deepens step 6 of our first-order guide and shows how payment is linked to Incoterms.
Payment Options Compared
| Method | Buyer risk | Supplier risk | Cost | When appropriate |
|---|---|---|---|---|
| 100% advance payment | High | None | Transfer fee | Very small orders (samples, < €1,000), if the supplier is verified |
| Partial deposit (30–50%) + balance before shipment | Medium–low | Low | 2 transfer fees | Standard for first orders; balance after inspection report and photos |
| Partial deposit + balance 30 days after delivery | Low | Medium | 2 transfer fees | 2nd–5th orders; once trust is established |
| Open account 30/60 days | None | High (uninsured) | Transfer fee | Regular relationship, framework agreement; supplier backs it with credit insurance |
| Letter of credit (L/C) | Low | Low | €300–1,000 + document workload | Large first orders (> €25,000–50,000), new markets |
| Cash against documents (CAD / D/P) | Medium | Medium | €100–300 | Sea freight shipments; impractical for road transport |
| Escrow | Low | Low | 1–3% | Rarely; small orders via platforms |
Typical Structure by Stage of the Relationship
- Sample order: 100% advance payment (small amount) or the sample cost credited against the first series order.
- First series order: 30–50% on order confirmation, balance before shipment; the balance is paid after the inspection report, material certificate and packaging photos have been sent. This structure is also standard for Turkish exporters: material purchase and capacity reservation are financed by the deposit.
- 2nd–5th order: 30% deposit, balance 30 days after delivery; or 100% before shipment without a deposit.
- Regular supply (6+ months): Open account 30 days (45–60 in some sectors), under a framework agreement; the supplier manages its risk with Türk Eximbank or private credit insurance. For the buyer, this is the most comfortable arrangement in cash-flow terms.
Turkish suppliers asking for a deposit on a first order is not distrust but export practice; even suppliers within Europe set similar terms for new customers. By contrast, a supplier insisting on 100% advance payment (other than for small samples) is a red flag.
Tying Payment to Documents and Control Points
The payment term should be designed together with Incoterms and quality control points:
- Balance before shipment: Write a clear trigger such as "within 3 working days after the inspection report + 3.1 certificate + packaging photos have been sent"; the supplier sends the documents, the buyer pays, the load leaves.
- Alignment with FCA/DAP: Under FCA, risk passes to the buyer when the load is handed to the forwarder; tying the balance to this moment is natural. Under DAP, delivery takes place at the door; "30 days after delivery" is consistent with DAP.
- Quality retention: On large first orders, retaining 5–10% and paying it after incoming inspection (e.g. 14 days) is possible; Turkish suppliers may accept this on a first order but do not prefer it as an ongoing practice.
- Partial shipments: Each batch with its own invoice and due date; for call-off orders, a monthly consolidated invoice can be agreed.
Currency and Exchange-Rate Risk
- EUR is standard: Export-oriented Turkish suppliers quote and invoice in EUR; the exchange-rate risk is not on the buyer. USD is also common.
- GBP, CHF, SEK, NOK, DKK: Reference prices can be given on request; an exchange-rate adjustment rule (e.g. repricing if the EUR/GBP band of ±3% is exceeded) is written into the contract.
- Payment in TRY: Makes no sense for the buyer; the Turkish supplier does not want TRY for exports either.
- Long-term contracts: Adjustment rule for raw material (aluminium LME, steel index) and energy; a band for exchange rates.
Bank Transfers: Practical Points
- Turkey is not in the SEPA area; payment is made by SWIFT transfer and takes 1–2 working days. Charge sharing (SHA is common) is stated on the invoice; a deduction of €10–30 on the supplier side is normal.
- Payment is made to a corporate account in the company's name; personal accounts are not accepted.
- EUR accounts at Turkish banks use IBANs (starting with TR); the BIC/SWIFT code is on the invoice.
- Payment reference: order number and invoice number; required for customs and accounting reconciliation.
- There is no withholding tax on payments for goods; for service (engineering) invoices it may differ by country.
Precautions Against IBAN Fraud
The most common fraud in international trade is the "our bank account has changed" message sent from a compromised e-mail account. Rules:
- Bank details are taken only in the initial contract, in a signed document.
- Any IBAN change is verified by voice from the known telephone number (not the number in the e-mail).
- If the invoice IBAN does not match the contract IBAN, no payment is made.
- The account holder name must match the company name exactly; a bank account in a different country (e.g. a Baltic or Asian bank for a Turkish supplier) is a red flag.
- Testing the first payment with a small amount (sample cost) also verifies the account.
When Does a Letter of Credit Make Sense?
A letter of credit protects both parties with a bank guarantee; however, the document workload (invoice, packing list, CMR/bill of lading, certificate of origin, inspection report) and cost (opening, confirmation, document examination; €300–1,000 in total) are disproportionate for small orders. It makes sense for first orders above €25,000–50,000, especially if the buyer's purchasing policy requires it. Document discrepancies lead to payment delays; the documents must be agreed with the supplier in detail beforehand. For road shipments, the CMR is accepted as a letter-of-credit document.
Credit Insurance and Supplier Financing
Turkish exporters can work on open account by taking out credit insurance through Türk Eximbank or private insurers (Allianz Trade, Coface, Atradius); the insurer assesses the buyer's creditworthiness and grants a limit. For the buyer, the result is: if your credit standing is good, open account is possible early in the relationship. Sharing your company's trade registry and financial information with the supplier speeds up the process.
Frequently Asked Questions
Is it safe to make an advance payment to Turkey?
A partial deposit of 30–50% to a verified supplier, into a corporate account in the company's name, is safe and standard. 100% advance payment is reasonable only for small sample orders.
When can I move to open account?
Typically after 3–5 trouble-free orders or 6 months of regular supply; earlier if you have a credit insurance limit.
What happens in case of late payment?
Late-payment interest and the right to suspend shipments are written into the contract; in the EU, the B2B late payment directive supports late-payment interest. In practice, communication and a payment plan resolve it.
Can credit cards or PayPal be used?
Not common in B2B CNC trade; commissions (2–4%) increase the price. Some suppliers accept them for small sample costs.
Conclusion
The right payment structure is risk sharing according to the stage of the relationship: partial deposit plus document-linked balance on the first order, 30-day open account as trust builds; letter of credit for large first orders; and in every case an EUR invoice, a corporate account and a telephone-verified IBAN. Tornelle starts with a 30–50% deposit plus balance before shipment on first orders, works on open account with regular customers and issues all invoices in EUR to the company account. For a line-by-line quote including payment terms, send your technical drawings via our quote form; for the contractual framework, see our supplier selection article.
