Koshchyna T. O., Reznikova T. O., Donchenko M. V.
Kharkiv National Economic University
SELECTION OF THE OPTIMAL METHODS OF INTERNATIONAL SETTLEMENTS
The modern world economy is characterized by a significant increase of internationalization, which appears in the growth of export-import operations. The process of market transformation in Ukraine, the activity of foreign domestic entities, their access to international markets for goods and services cause a comprehensive study of problems in relations between the participants of international. Therefore the most urgent issues of increasing the operations efficiency in the international markets are due to the reasonable and rational use of international payments. The choice of one of forms of settlement is up-to-date due to the fact that members of international settlements have faced with economic, political, tax and other risks.
International settlements cover trade in goods and services, non-commercial transactions, loans and capital movements between countries, including relationships associated with construction projects abroad and providing economic assistance to countries. One of the most important prerequisites for the success of international trade is the correct choice of international settlements form because it enables the participants to reduce transaction costs and extenuate the risks of counterparty default of its obligations under the contract.
To determine the effectiveness of international settlements using by domestic enterprises financial and external-economic activities were analyzed on the basic of Public Research and Production Enterprise “Komunar”. Having analyzed the enterprise settlements with the foreign partners we saw that the company uses absolute prepayment to reduce the risks in conducting foreign operations. Financial situation of PRPE "Komunar" is unstable in spate of the efforts to keep the risk at low level. It mainly happens due to the fact that the value of resource exceeds the value of working capital and the value of long-term sources of funding. The level of receivables was significantly increased in 2011, which still has affected the company financial condition.
On the basis of the data analysis we can speculate about the ineffectiveness of monetary policy of the enterprise. Therefore practical recommendations for profitable settlements running with foreign partners were developed, which undoubtedly will enhance the enterprise competitiveness.
The basic steps to make international settlements business with contractors are the following: firstly, the policies for international settlements should be developed, aimed at effective use of the conditions, facilities and forms of settlements; secondly, the system of evaluation of the counterparty financial stability and solvency situation has to be carried out; thirdly, the system of estimation of the enterprise creditworthiness based on the data of the international credit and rating agencies also must be made up; fourthly, the main issue is to rank the customers depending on the results concerning their solvency and creditworthiness; fifthly, according to the enterprise ranks one should use the conditions and the settlement forms with the foreign partners.
If the solvency and creditworthiness level is high enough the company can use a bank transfer operations as a form of settlement. On terms of the advanced payments in the determined amount and bank transfer PRPE "Komunar" reduces the risk of non-receipt payment after sending the goods. The company is able to combine these terms and forms because Ukrainian banks have established a network of correspondent banks in many countries and exporting company is not liable for commission payment in conducting operations. The usage of the collection of payment is the most disadvantageous for PRPE "Komunar", as far as there is no assurance that the importer actually will make the payment. Letter of credit is quite expensive and requires strict observance of all formalities of registration and submission to the bank but also the most reliable tool for payment obtaining.
Therefore to improve the financial situation and settlements in foreign trade contracts PRPE "Komunar" should abandon the current practice extortion of the absolute prepayment. The combination of different conditions and forms of settlement can significantly improve the efficiency of foreign trade transactions of the enterprise.