Belco Company: Payment Methods and Interactions with Customers

Date:  2021-03-13 14:19:03
3 pages  (897 words)
Back to categories
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Debtors day = (55000/472500)*365 = 42.48 days

Belco takes a total of 42 days to collect debts from Kooritsa Kiev customers in particular. However, the company collects most of its debts between 15 to 30 days.

Wire transfer

Online wire transfer is a means of payment which aid in international transfer of funds from one party to another. For Belco to receive payment from clients or make payment to the suppliers, they need to sign or log in to an online banking and select the account number from another bank. International wires take a maximum of two days to reach in the business account, and it is available in more than 200 countries across the globe. In case Belco or the transacting parties doesn't know the currency in which either of them is using, the company is allowed to use US dollars. There are different charges which individuals, businesses, and companies incur while they use this system. Before choosing the choice of transfer, they are supposed to consider the availability of the currency, exchange rates prevailing in the market, and the fees to be charged for transaction. In different cases, the fees to be charged is categorized in different levels

Outbound domestic wire transfers $30

Outbound international wire transfer of foreign currency $35

International wire transfer sent in US dollars $45

Letter of credit

Belco Company also receives and makes payments to its international clients and shareholders by the use of letter of credit. A letter of credit is a letter from a bank guaranteeing the company that the payments from the buyer to the seller are guaranteed. In case the buyer could not be in a position to pay the entire amount, the bank will recover the entire amount on behalf of the buyer. The letters of credits are used in international trade to give an assures that the payment has not been received. It also ensures that the factors such as difference laws in different countries and distance are factored in during business process. The bank also acts on behalf of the buyer and will ensure that the payment is made only after the goods have been shipped. Suppose the debt is $100 million which are outstanding, if the buyers do not adhere to the terms of payments, and pay only $40 million, then the bank through the letter of credit transactions will pay the remaining $60 million to Belco.

Other types of international financial arrangement and transfer used by the company include western union money transfer, pioneer, and skrill. The company also uses check on balance system to protect their financial assets and the receivables.

Considerations determining Belcos interactions with the customers

The credit team did carry out numerous concerns so as to ensure effective interaction with the customers. In the case of new customers, the credit team created a new credit file regardless of the credit terms. The information was being collected from a variety of sources which include from customers themselves, from the customers' financial statements and brochures which Belco uses to ensure that there is an efficient resource for effective interaction between the company and the stakeholders (customers). Besides, they also obtained bank references and outsourced information from third party reporting companies like Bradstreet & Dunn and Sea Fax. The information acquired aided the company to know the credit terms to offer to various clients, the credit limits, renegotiations and payment history of the customers. It also helps them to sort out claims and other deductions. In addition to the customer information, the company was also committed to identifying the market factors which might affect the interaction between the company and the customers. They reviewed the control policies which would have caused the delay in payments and depreciation and devaluation of currency which would have affected the prompt payment of the customers to Belco Company. Besides, in countries where there were many customers and Belco wanted to remain competitive, they were selling to them in sight draft terms which replace the customer risks with market risks. All these factors aided the company in making sound decisions while dealing with the customers and other stakeholders as well.

Terms Belco should offer to the two new customers

There are various terms of trade that the company should offer to the new or recent customers. They include the use of wire transfer, open account and the use of letter transfer during local/domestic and international transactions.

Pam Arnold collection of overdue payments from Kooritsa Kiev

When Belco company have experienced a debt overdue from Kooritsa Kiev amount worth $ 84000 of bone in hams and chicken leg quarters, they had various strategies which can enable them to acquire their debts after several attempts but in vein. The first approach is to consult the customers further. They decided to call the purchasing agent - Sergei Barscov or a member of a credit team from Moscow Office should visit the customers to talk to the company on personal grounds. They also had an option to use communication resolution mechanism. They should hire a legal expert and take Kooritsa to court or threaten them to do so. The third option the company had is to file a claim to the insurance company.It will thus minimize the time and resources for debt collection process. Thus, whichever the method Pam Arnold choose to use, he needs to act as quickly as possible so as to keep the reputation of the Company.


Blenco Global Food Co (2010). An interview with Pam Anorld Journal .

logo_essay logo_essay

Request Removal

If you are the original author of this essay and no longer wish to have it published on the ProEssays website, please click below to request its removal: