China remains one of the main trading partners for Russian companies. Thousands of businesses buy equipment, raw materials, components, furniture, electronics and other goods from Chinese manufacturers every day. Paying an invoice, however, has become noticeably harder in recent years.
Many business owners run into bank rejections, extra checks and long processing times. That is why it pays to understand — before the deal is even signed — which documents you will need and how settlements with Chinese suppliers actually work today.
What an invoice is
An invoice is a bill for payment issued by a supplier to a buyer.
It usually sets out:
- the seller's and buyer's details;
- a description of the goods;
- the quantity;
- the price;
- the payment currency;
- the beneficiary's bank details.
It is the invoice that an international payment is made against.
Which documents are usually required for payment
The set of documents depends on who is paying: a company or an individual.
Companies normally need:
- the invoice;
- the foreign trade contract;
- any deal documents the bank asks for.
For individuals, an invoice or the beneficiary's bank details are enough in most cases.
The exact list depends on the payment amount, the bank and the structure of the deal.
Why payments to China run into trouble
In practice, the problems usually come from bank controls rather than from the Chinese side.
The bank may ask for extra documents to confirm the commercial substance of the transaction, the source of funds, or that the payment complies with currency legislation.
There are also cases where a bank is simply not willing to process payments to a particular destination, or requires additional approvals.
As a result, payment timelines can stretch from a few days to several weeks.
Which currency Chinese suppliers are paid in
The most common options are:
- Chinese yuan (CNY);
- US dollars (USD);
- euros (EUR).
In recent years many Chinese companies have preferred to be paid in yuan. That often makes settlement simpler and cuts the number of intermediary banks in the payment chain.
The currency itself is set by the contract terms and the supplier's requirements.
What to check before you pay
Before transferring the money, check:
- that the bank details match the supplier's own records;
- that the contract and the invoice say the same thing;
- that the receiving company is validly registered;
- the delivery terms and the shipping procedure;
- whether you will be able to obtain supporting documents for the deal.
Even a small error in the bank details or the paperwork can lead to the payment being returned and to extra costs.
How the invoice payment works
In most cases the process looks like this:
- 1The supplier issues the invoice.
- 2The parties agree the delivery terms.
- 3The necessary documents are prepared.
- 4The international payment is executed.
- 5The supplier receives the funds.
- 6Production or shipment begins.
How long the money takes to arrive depends on the payment route, the currency and the beneficiary's bank.
What to do if the bank rejects the payment
A rejection by the bank does not always mean the payment cannot be made.
The reasons vary:
- the bank's own internal policy;
- an incomplete document package;
- restrictions on a specific destination;
- additional financial control requirements.
In such cases the important thing is to establish why the payment was declined and to choose a suitable payment route, taking into account the nature of the deal and the requirements of the law.
Summary
Paying invoices to China remains a workable way to buy goods, equipment and components. The main things to focus on are preparing the documents properly, checking the supplier and choosing a reliable payment solution.
The better the deal is prepared at the start, the lower the chance of delays, follow-up requests and returned funds.