Paying a supplier in China

Payment recipient

The bank account of the company named in the agreed documents

Before payment

We verify the beneficiary details, invoice and payment terms

Confirmation

We provide the payment details and supporting document

Terms

Confirmed before the transfer

What methods exist for paying a Chinese supplier

The main payment methods differ not only in speed but also in the evidence they leave. A bank transfer to a Chinese company's account creates a bank record linked to the invoice. Payments made through some payment apps or in cash may leave a weaker audit trail than an invoice-linked bank transfer. Choose the method by asking one question: could you later prove that you paid this supplier for this shipment?

In whose name the payment and the documents are drawn up

The client remains the importer of record. That determines both the beneficiary and the paperwork: the invoice is issued to your company or sole trader, the payment goes to the account of the Chinese company named in that invoice, and the payment confirmation is tied to its number. We produce the quote and prepare the documents on our side of the work, but we do not become the importer in your place.

• The supplier's invoice is issued to the importer – the company or sole trader that will be bringing the goods in.
• The names of the payer, the importer and the beneficiary must not diverge between the contract, the invoice and the payment reference.
• The importer's details are needed before dispatch: the declaration and the conformity document are drawn up in the same name.
• Customs clearance is an additional service on request, DPC is not a customs broker.
• The composition of the set under the import scheme selected – documents and official import.

Why a payment to China may not go through

A payment comes back or hangs almost always because of the data, not because of the amount. The beneficiary's bank and the intermediary bank check the company name, the account and the payment reference against each other. Any discrepancy stops the crediting, and the money travels back along the same chain.

• The beneficiary's name on the payment order does not match the company name held by the bank in China: a different word order, a different transliteration, a missing part of the name.
• The payment reference does not describe the goods or contradicts the invoice and the contract.
• The beneficiary in the bank details is a private individual while the payer is a company.
• The supplier has sent a branch account or an old account that the bank has already closed.
• The intermediary bank has asked for documents on the transaction, and there is no contract, invoice or packing list.
• Compliance has asked for the purpose of the payment and the source of funds, and no answer has arrived within the time allowed.
• The currency of payment is not suitable for this type of settlement at the beneficiary's bank.

What verification of the bank details is and why it is needed

Verification of the bank details is a check, before the payment, that the beneficiary's account belongs to the same company that issued the invoice and signed the contract. It is done once for every new beneficiary and repeated on any change of bank details. That is cheaper than unpicking a returned payment or arguing about who the money went to.

• The beneficiary's name in the bank details is checked character by character against the name in the invoice and the contract.
• We check that the company is registered and entitled to receive export settlements.
• We check the bank and the SWIFT code: they must belong to the same bank and city as those given in the bank details.
• We record the invoice number that will go into the payment reference.
• We record exactly who on the supplier's side sent the bank details and through which channel.

A discrepancy in a single field is not a formality but a reason for refusal. If the supplier cannot explain the discrepancy, the payment does not leave until the matter is cleared up. The same principle applies when buying goods on 1688 and Taobao, where a single order may involve several sellers.

The supplier asks to be paid into a personal account or into another company's account

Such a request is grounds for stopping the payment and asking questions, not a reason to transfer in a hurry. It also occurs for legitimate reasons, for example where the supplier works through an export agent. A check is needed in any case, because the beneficiary determines who you will be able to hold to account for the supply.

• A personal account: the obligation to supply stays with the company while the money has been received by a private individual. In practice there is no one to bring a claim against for short delivery.
• A third company's account: acceptable if the supplier has named the agent and the amount in writing and the agent is mentioned in the invoice.
• A last-minute change of bank details in the same email thread is a classic sign of a compromised mailbox. New details are confirmed through a different channel of communication.
• A request to break the amount into several small transfers to different accounts: the payment is stopped until the reason has been explained.

DPC pays into the account of the company named in the invoice. If the supplier insists on a different beneficiary, we record that in writing and show how it changes your position in the event of a dispute. The decision stays with you, but it is taken before the transfer, not after.

What a payment through DPC looks like, step by step

What documents you receive on the payment

• The supplier's invoice to which the payment is tied.
• The payment confirmation: amount, currency, beneficiary, invoice number.
• The goods receipt report from the warehouse in Guangzhou: number of places, weight, volume.
• The photo report from the inspection of the goods before dispatch.
• The packing list for the dispatch and the documents under the delivery scheme selected: cargo or official import.

The set is not needed for the sake of record-keeping. A payment confirmation quoting the invoice number is what you use to talk to the supplier about short delivery. The goods receipt report and the photo report are what you use to record the condition of the goods before dispatch, rather than after unloading at your own premises.

What happens on a refund, a short delivery and a partial delivery

All discrepancies are recorded at goods receipt in Guangzhou, before dispatch. That is the key point: while the goods are in China the supplier still has open obligations and a reason to put the mistake right. After dispatch there is almost no leverage left.

• Short delivery by quantity: we record it at goods receipt, show the discrepancy against the invoice, and the supplier sends the missing part or adjusts the amount.
• Defects or non-conformity: photographic record before dispatch, replacement or return of the item to the supplier while the cargo has not yet left Guangzhou.
• Partial delivery: we dispatch what has been received, and the remainder waits for a further shipment or for the next consolidation. The minimum weight applies to the dispatch as a whole rather than to each supplier, and the remainder waits at the warehouse with no charge for storage.
• Full refund: the funds come back by the same route the payment took, and that needs time from the banks on both sides.
• The supplier has received the money and is not dispatching: the bank confirmation of payment becomes the main argument in the correspondence and in the conversation with the marketplace or the agent.

The dispatch weight the payment and delivery are calculated on

We accept commercial shipments. It pays better to build a larger consignment: goods receipt, packing and paperwork depend little on weight, so on a small shipment those operations are divided by fewer kilograms and the price per kilogram is noticeably higher.

Payments meanwhile stay tied to the number of invoices: consolidation combines the cargo, not the settlements with suppliers. Waiting for a top-up costs nothing, because we have no paid storage at all – the goods receipt procedure is described on the page warehouse in Guangzhou.

If you currently work with another provider, the payment and goods receipt procedure is easier to compare on a single small consignment run alongside your present arrangement. How that works is described in the section switching to DPC, and the way the cost of a supply is built up is set out in the section pricing.

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