๐ฐ Finance & Pricing
Payment Terms Cost Calculator
TT/LC/OA working capital cost calculator. All calculations run locally in your browser โ free, instant and private.
๐ฆ Order basics
๐ณ Payment terms (2-3)
๐ก Capital cost accrues from order confirmation until balance arrival; risk reserve applies to the unadvanced balance only
โ Comparison (by term cost asc)
๐ Terms Cost Guide
The real cost behind T/T, L/C and OA
Payment terms are a financing decision: an OA 60 means floating the full order cost for two months โ at 8% annualized that is another ~1.3% on cost, before risk reserves and collection fees. This tool converts every term into a comparable "total term cost".
Capital cost accrues from order confirmation until balance arrival, matching how factories actually fund production; advances shrink the funding gap. Treat L/C bank fees as indicative until your bank quotes.
โ FAQ
What is the risk reserve?
A bad-debt buffer on the unadvanced balance (e.g. 2.5%) โ essential when granting OA to new buyers.
Why does capital cost dwarf fees on OA?
Fees are one-off percentages; capital cost compounds over months of float โ the quantified cost of "terms are money".