Advance Payment / Cash in Advance
Category: Payments
Definition (plain English)
Advance payment or cash in advance means the buyer pays before production, shipment, or document release, often as a deposit, full prepayment, or staged milestone.
Why it matters commercially
It lowers seller credit risk but increases buyer exposure to fraud, non-performance, quality failure, shipment delay, and weak recovery if the supplier does not deliver.
Example
A buyer paid 30% in advance only after legal-entity verification, bank callback, sample approval, and written balance-release conditions tied to inspection.
Common mistake
Calling an advance standard practice while leaving supplier identity, bank verification, milestone evidence, refund rights, and inspection controls undocumented.
Use this in CommerceKit
Currency Exposure & FX Buffer Calculator
Use tool →Payment Terms Cost / Risk Calculator
Use tool →