Tales of foreign sales.

• Author: Costa, Robert R.

Bob and Kang are on different sides of the same sale, not to mention different countries. Tune in for a lighter look at the snags they encounter in sewing up their export transaction.

This is an accounting novel that juxtaposes the complementary perspectives of a buyer and seller in global trade. Bob is controller of a U.S. manufacturing company, and Kang is a Far Eastern buyer purchasing some paper-converting machinery from Bob's firm. The story follows the sale from signed equipment order to installation. Do any of these export issues sound familiar to you?

THE PROCESS BEGINS

June 3, 1996

A short time ago in a bank far, far away, Kang applies for financing.

KANG: I signed the equipment order four months ago, and I keep faxing their sales manager that we're working on getting the funds. The import license requirements makes the whole deal a chicken-and-egg situation. When we finally get the license, it's good for only three months. I have to be careful on the letter of credit's latest ship and expiry dates.

Meanwhile, back in the States ... Bob is contemplating the sale to Kang.

BOB (sings): Summer's here and the time is right for deposits in the banks!

The equipment order shows a total price of $500,000. A 15-percent deposit is $75,000, with a letter of credit for the rest. Will they be home for Thanksgiving?

I don't get it. It's been four months since sales gave me a copy of the faxed, signed order. So what? Without money, the customer isn't really committed. Our general manager has decided to release a stock machine to manufacturing. If this customer doesn't come through, we're stuck with a finished product and no cash.

At a recent export seminar, a speaker told me Bank of America flowcharted this foreign-credit-approval process. I'll try to get a copy.

REFLECTIONS

July 1, 1996

KANG: The Drupa [a German acronym meaning "spotlight on all new technologies for the global printing and paper market"] trade show was quite an experience. Dusseldorf gets to accommodate the revenues of more than 500,000 visitors from the printing industry. Seems like it took a week to find the Americans' booth, but watching their machines run made it easier to see which equipment would serve us best. You can't be too careful when you're investing half a million dollars. It was also nice to meet the people who actually design and build the machine. They seem to have a good relationship with Vince, their Far Eastern sales agent.

BOB: Glad we got something at Drupa. Almost half a million in expenses...