CK

Payment Terms Cost / Risk Calculator

Estimate the cash cost and risk pressure created by deposits, deferred payment, document release, and long payment windows.

Best used for: Deposit vs LC vs open-account decisions.

Enter the deal assumptions you want to stress-test.

Planning inputs

Use current quote, payment, or shipment assumptions.
$

Amount at risk, financed, prepaid, or left outstanding.

%

Internal working-capital cost, bank rate, or opportunity-cost assumption.

days

Days between payment release, delivery, document control, or collection.

Planning outputs

25,000 exposed for 60 days at 9.0% annual cost implies about 369.86 of financing pressure.
Estimated financing cost
369.86

Cash cost of carrying this exposure for the entered period.

Effective payment-term cost
1.48%

Financing cost as a share of the exposure amount.

Risk pressure
Medium

Directional signal based on days at risk.

When to use this page

  • Comparing TT deposits, balance triggers, LC costs, D/P, D/A, and open-account pressure.
  • Showing how payment windows consume margin before approving a risky payment structure.
  • Deciding when payment risk needs stronger documents, insurance, callback controls, or bank review.

Calculation assumptions

  • Financing cost = exposure x annual rate x days exposed / 365.
  • Effective cost % = financing cost / exposure.
  • Risk pressure is a planning signal, not a credit decision or legal opinion.

Before relying on the result

Reconcile the result against the full commercial file: supplier quote, Incoterm, payment term, freight quote, landed-cost model, and any official or bank-controlled source that governs the actual transaction.

What this tool does not do

  • Underwrite credit risk.
  • Screen sanctions, restricted parties, or bank ownership.
  • Replace bank, legal, insurance, or credit-control advice.

Frequently asked questions

Is this a credit decision?

No. It only estimates cash cost and timing pressure. Screen the counterparty, verify bank details, and use professional credit, legal, or banking advice for real exposure decisions.

Disclaimer. These tools provide estimates for general informational purposes only. They are not financial, tax, customs, legal, or professional advice. Always verify calculations with your accountant, customs broker, freight forwarder, or relevant professional before making business decisions.