Why should timing stay separate from the quoted total?
The International Trade Administration describes advance payment as full or significant payment before shipment and discusses the differing buyer and seller interests. That export guidance supports considering when payment occurs; it does not supply a standard milestone schedule for an electrical package.
RFQ Templates is independent and is not affiliated with the International Trade Administration. Use the supplier's actual terms and the buyer's approved commercial basis. This comparison does not approve a payment, provide bank instructions or establish contractual entitlement.
Sources: International Trade Administration: Cash-in-advance export payment guidance
How should percentages be normalised?
For a fixed common price basis, cumulative payment equals the sum of incremental payments through the milestone. The increment equals the current cumulative total minus the prior cumulative total. Keep tax, freight, variation and retention bases explicit before applying either formula.
| Fictional milestone | Incremental payment | Cumulative paid | Unpaid balance |
|---|---|---|---|
| Order release | 20% | 20% | 80% |
| Approved factory acceptance milestone | 30% | 50% | 50% |
| Shipment milestone | 40% | 90% | 10% |
| Final approved milestone | 10% | 100% | 0% |
What mistake does adding cumulative columns create?
Illustrative example. A supplier writes paid to date percentages of 20, 50, 90 and 100 on the same fixed basis. Their sum is 260 percent, but that is not the agreed total payment. Taking differences gives increments of 20, 30, 40 and 10 percent, totalling 100.
The schedule and milestones are invented, not typical industry terms. Compare equivalent percentage bases rather than call a supplier over-priced because a cumulative column was added as if it were four new payments. Do not treat a forecast milestone date as a confirmed payment trigger.
What should the commercial comparison preserve?
Keep the exact supplier wording, percentage denominator, evidence required for each milestone, due-date basis and remaining balance. A schedule of 100 percent still needs review if the earlier payment point or required evidence differs. If percentages decrease, stop and clarify whether credits, retention or changed bases are involved.
Separate arithmetic normalisation from the commercial decision about acceptable advance exposure. The buyer's authorised procurement and contracts reviewers decide that position. Missing wording remains a supplier clarification; it should not be repaired by inventing the supplier's intended terms.
Common questions
What else should the bid team know?
Should cumulative percentages be added?
No. Derive the milestone increments from differences on the same basis.
Does a 100 percent total prove equivalent terms?
No. Timing, evidence and scope can differ.
Can tax or freight use a different denominator?
Yes. Identify each actual basis before comparing percentages.
Primary sources
- Cash-in-advance export payment guidanceInternational Trade Administration