There are different payment methods that you can use in international trade, each with its own advantages and disadvantages. The most common ones are cash in advance, letter of credit, documentary collection, open account, and consignment. Cash in advance is the most favorable for the seller, as it eliminates the risk of non-payment and improves the cash flow. However, it is the least favorable for the buyer, as it increases the risk of non-delivery and ties up the working capital. Letter of credit is a guarantee from a bank that the seller will receive the payment upon presenting the required documents, such as the invoice, the bill of lading, and the certificate of origin. It reduces the risk for both parties, but it also involves higher costs and complexity. Documentary collection is a process where the seller ships the goods and instructs a bank to collect the payment from the buyer, either at sight or at a later date. It is less costly and complicated than letter of credit, but it also offers less security and control. Open account is the most favorable for the buyer, as it allows the buyer to pay the seller after receiving the goods or services, usually within 30 to 90 days. However, it is the most risky for the seller, as it exposes the seller to the possibility of late or non-payment. Consignment is a arrangement where the seller retains the ownership of the goods until they are sold by the buyer, who acts as an agent. It can help the seller to enter new markets and increase sales, but it also delays the payment and increases the inventory costs.