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Advance Payment

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Advance payment is a type of down payment or prepayment a good or service is realized. Advance payments are sometimes required to clear the trade and sometimes to cover the seller's costs to supply the product or service.

Advance payment may cover the total amount or part-paying a supplier before the goods are delivered. The general practice in cross-border trade is that the payment is made after the freight service is received. However, making payment at the reservation stage is a common method in practice.