On this page
Give production a clear release instruction
A new U.S. customer wants equipment that your overseas team must build or configure. Sales wants to start quickly; purchasing needs to place orders. Put one person in charge of confirming the payment condition before those commitments begin.
The U.S. International Trade Administration (ITA) describes cash in advance as payment before shipment, with wire, card and escrow among the possible arrangements. The practical choice depends on the actual terms and provider. Do not turn that description into a promise of no fraud, refund or performance risk.
A deposit may cover only part of the commitment
Fictional example, all amounts in U.S. dollars: an order is priced at US$80,000. The agreed advance is 30%, or US$24,000. Your team would commit US$36,000 to materials and setup before the next payment. The advance alone leaves US$12,000 of those commitments unfunded.
That gap is not automatically a loss or a borrowing requirement. Identify other available cash, supplier terms and later receipts. Also record what happens to the advance if specifications change or the order is cancelled; the example creates no refund entitlement.
| Before work starts | Evidence to obtain |
|---|---|
| Payment condition | Amount, currency, recipient and any escrow or release conditions |
| Funds confirmation | Bank/provider confirmation of what is available and any holds or reversal issues |
| Production authority | Named person who can release materials, setup and subcontract work |
| Balance and changes | Later payment triggers, approved specifications and change/cancellation terms |
Keep receipt, release and delivery separate
If the money sits with an escrow provider, understand when it becomes available to you. If payment uses a card, ask about the applicable dispute and settlement arrangements. These questions belong with the provider and agreement, not an assumption that every payment message is final cash.
Give the production manager a short dated approval: the order version, the payment condition checked, the commitments authorised and any limit still outstanding. Keep banking documents in your secure business process, not on this educational site.
Approve the gap as well as the order
Ask management whether the order can be funded under the negotiated payment stages. If not, change the sequence, reduce the first commitment or obtain supported funding before proceeding. A promising customer does not supply cash for the missing stage.
Keep this order’s dated ledger beside the wider monthly Cash runway model. The tool does not verify settlement, decide refund rights or approve the production contract.
Scope
- Commercial preparation and fictional arithmetic only. Provider settlement rules, actual contract rights, tax and any franchise or other regulatory requirements need their own checks.
Next step
Use Cash runway for the wider monthly position, and keep a separate order-release record showing the payment condition, available funds, authorised spend and remaining funding gap.
Sources & review notes
U.S. International Trade Administration
Passage, dates and research notes
official-guidance · Payment before shipment; wire, card and escrow choices
Selected payment sequence read. No claim of zero fraud, refund, performance or bank risk is adopted.
Bookmark this guide or mark it as read.
Progress privacy
Saving is off by default. Without it, progress lasts only on this page. If you turn it on, this browser profile stores public content IDs and the progress you record. Anyone sharing the profile could see them. No plan inputs or contact details are included. Reset or export in learning settings.
This is a reading aid, not evidence of disclosure delivery, expertise or legal approval.