Buyers and suppliers credit

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Querist : Anonymous (Querist)

09 May 2013 What is the difference between buyers and suppliers credit....used for payment to foreign countries..

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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11 May 2013 A buyer is any person who contracts to acquire an asset in return for some form of consideration.

When someone gets characterized by their role as buyer of certain assets, the term "buyer" gets new meaning:

A "buyer" or merchandiser is a person who purchases finished goods, typically for resale, for a firm, government, or organization. (A person who purchases material used to make goods is sometimes called a purchasing agent.)

In product management, buyer is the entity that decides to obtain the product.

A buyer's primary responsibility is obtaining the highest quality goods at the lowest cost. This usually requires research, writing requests for bids, proposals or quotes, and evaluating information received.

SUPPLIERS CREDIT
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Suppliers Credit is A financing arrangement under which an exporter extends credit to a foreign importer to finance his purchase. Usually the importer pays a portion of the contract value in cash and issues a Promissory note or accepts a draft as evidence of his obligation to pay the balance over a period of time. The exporter thus accepts a deferred payment from the importer, and may be able to obtain cash payment by discounting or selling the draft or promissory notes created with his bank.

As per the circular on trade guidelines published time to time by the Reserve Bank of India, a capital goods importer can avail a Suppliers Credit for the maximum tenure of 3 years and a revenue goods importer can avail a Suppliers Credit for the maximum tenure of 360 days. However, where the client has used LC, the total tenure cannot exceed 3 years or 360 days respectively.