China Supplier Payment Terms: What To Check Before Paying The Balance
Plan China supplier payment milestones with a worked 30/70 example, inspection release checklist and bilingual message before paying the balance.
A 30% deposit and 70% balance describes payment amounts, not the evidence required before payment. Agree the production specification, inspection process, acceptance decision and payment trigger before sending the deposit. “Ready to ship” and “accepted by the buyer” are different milestones.
This guide is for buyers negotiating a new order. It is an operational checklist, not permission to withhold a payment already due under an existing agreement. For an existing dispute, review the signed terms and obtain appropriate advice.
Separate The Payment Method From The Payment Milestone
A wire transfer explains how money moves. A deposit/balance schedule explains when it becomes due. An inspection agreement explains what evidence supports acceptance. Write all three down separately. The US International Trade Administration's payment-method guide explains the trade-offs between advance payment, letters of credit, documentary collections and open account. These methods allocate risk differently; bank involvement alone does not establish product quality.
For a small first order, begin with the actual offer and the supplier's production costs. Ask which materials are customised, which costs cannot be recovered and whether tooling is charged separately. A smaller deposit is useful only if the revised order still has a workable production plan. There is no universal percentage that makes a supplier safe.
A $6,000 Order: Same Split, Different Decision Process
Assume a hypothetical order for 1,000 organisers at $6 each, excluding freight, testing and inspection. A 30/70 schedule means a $1,800 deposit and $4,200 balance. The following comparison does not change the price; it changes what the buyer and factory have agreed to do before the balance falls due.
| Question | Vague arrangement | Proposed arrangement to negotiate |
|---|---|---|
| Production reference | Chat photographs | Specification R3, packaging artwork P2 and approved sample ID |
| Readiness | Supplier says finished | Defined quantity and packing status available for inspection |
| Acceptance | Unspecified | Named buyer reviewer assesses agreed report and unresolved defects |
| Failed check | Discuss later | Agreed correction, reinspection cost and timing process |
| Balance | Before shipment | Due at the expressly agreed acceptance milestone |
If inspection is budgeted at an illustrative $300, the planned goods-plus-inspection cash requirement is $6,300, not $6,000. If a further $180 reinspection is your responsibility, it becomes $6,480. These are arithmetic examples, not inspection quotes. Confirm responsibility before placing the order; do not assume the factory pays for every repeat visit.
The Balance-Release Checklist
- Match the order. Confirm purchase-order number, quantities, variants, specification revision and approved packaging. Use our supplier quotation comparison to resolve exclusions first.
- Read the actual inspection result. Check who inspected, when, what lot was available, what was sampled and which tests were excluded. A report heading saying “pass” does not answer every contractual requirement.
- Close deviations explicitly. Record rework, replacement, agreed concessions and any outstanding evidence. Separate cosmetic acceptance from safety or required compliance checks.
- Verify the payment recipient. Reconcile the invoice and agreed contracting entity. Resolve any third-party beneficiary explanation before transferring money.
- Confirm the logistics handover. Identify who books transport and what documents are required. Our FCA/FOB guide explains delivery scope; an Incoterm is not a substitute for payment terms.
- Record the decision. Keep the authorised approval, amount, currency, beneficiary verification and payment reference together.
Download the balance-release checklist. It is a working record, not a legal contract.
What If Bank Details Change At The Last Minute?
The FBI's business email compromise guidance advises verifying payment requests and changes to account information. Use a previously established contact channel, rather than relying on the phone number or link inside the change request. A familiar email thread can still be compromised. Urgency, a new beneficiary and pressure to skip checks are reasons to stop and verify, not proof by themselves that the supplier is fraudulent.
A Message To Agree Before The Deposit
Please confirm the payment milestones for PO [number]. Our proposal is [deposit]% after specification approval and [balance]% after the agreed inspection and our written acceptance, before shipment. Please confirm inspection access, defect correction, reinspection costs, acceptance timing and the verified beneficiary. Please flag any terms you cannot accept before we place the order.
请确认订单[编号]的付款节点。我们的建议是：规格确认后支付[定金比例]%，按约定完成验货并经我方书面验收确认后、发货前支付[尾款比例]%。请同时确认验货安排、不合格项整改、复验费用、验收时限及经核实的收款账户。如有无法接受的条款，请在下单前明确提出。
Buyer Questions
Does a passed inspection guarantee the whole shipment?
No. Inspection has a defined scope and may use sampling. Read the pre-shipment inspection checklist and distinguish sample observations from full-lot guarantees, laboratory testing and destination compliance.
Can I change the balance trigger after paying the deposit?
Propose an amendment and obtain agreement. Do not assume an email demanding new conditions replaces the existing contract.
Does this replace Trade Assurance?
No. If using Alibaba, check the platform order and payment route separately with our Trade Assurance buyer checklist.
Need help clarifying quotations, production milestones and supplier replies in Chinese? Send your brief through HMZ Global's China Sourcing & Procurement service.