Paying overseas suppliers by deposit and balance

When you order physical goods from an overseas factory, you rarely pay all at once. Instead the order is funded in stages: a deposit when you place it, and the balance before the goods leave the factory. The split is usually paid by telegraphic transfer, also called a T/T or bank wire.

The exact percentages are a negotiation, not a fixed rule, but the logic behind them is consistent. Understanding why the stages exist, and what each one buys you, helps you hold the right amount of leverage over quality and timing without making the deal unworkable for your supplier.

How deposit-and-balance staging works

A typical arrangement is a deposit of commonly around 30% when the order is confirmed, with the remaining balance, often around 70%, paid before the goods ship. The two stages do different jobs.

• The deposit lets your supplier commit to your order. It funds raw materials, components and the labour to start production, and it signals that you are serious. Without it, most factories will not begin work.
• The balance is your leverage. Because you hold it until production is finished and ready to ship, you have a practical lever to insist on quality, completeness and timing. Once the balance is paid the goods are released, so the moment before payment is your best window to confirm everything is in order.

Both legs are commonly settled by T/T. The deposit goes out when you confirm the order; the balance goes out once you, or an inspection on your behalf, are satisfied that production is complete.

How the split shifts with the relationship

The deposit-to-balance ratio is not fixed. It typically moves with how much trust and history you have with the supplier, and with what you are buying.

• Samples are often paid close to 100% in advance. The amounts are small and the supplier has little incentive to extend terms on a one-off.
• Trial orders with a new supplier commonly land around a 50/50 split, reflecting that neither side has a track record with the other yet.
• Volume orders with a working relationship often settle near the classic 30/70, giving you meaningful leverage over the bulk of the value.
• Established suppliers may agree to release the balance against shipping documents, or extend further terms, once you have shipped together reliably for some time.

None of these are rules. Treat them as common conventions and negotiate the split that matches the risk you are actually carrying on a given order.

Managing the currency leg

Because both stages are usually paid in the supplier's currency, often US dollars, the payment method you use shapes your real cost. Two issues recur.

• Forced conversions. If your account only holds your home currency, each T/T may trigger a conversion at whatever rate applies on the day, on the supplier's schedule rather than yours. Holding the payment currency lets you avoid converting at the wrong moment.
• Timing the balance. The balance is due at a sensitive point, just before shipping and inspection. Being able to fund it on your own timeline, rather than scrambling for currency, keeps your leverage intact.

Keeping the deposit and balance traceable, and clearly tied to the relevant purchase order and invoice, also makes reconciliation far easier when the goods and paperwork arrive.

How Altery fits

Deposit-and-balance staging is exactly the kind of cross-border, multi-currency payment Altery is designed to handle. You can send both the deposit and the balance in your supplier's currency, at the timing you choose, via SWIFT and local payment rails, with each transfer traceable against its order.

Because you can hold a multi-currency business account in USD, EUR and GBP, you do not have to convert under pressure: you can buy the currency when the FX suits you and pay the deposit and balance from that balance, rather than triggering a forced conversion on each wire. Ring-fencing the funds for a specific order in a dedicated pot means the balance is set aside and ready before goods are due to ship, so paying it never threatens your leverage. Real-time balances and categorised spend keep both legs visible, and multi-entity management keeps payments separate if you buy through more than one company.

Altery is not a bank, and this guide is general information, not advice. The percentages and day-counts here are common conventions; confirm the right terms with each supplier for each order.

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