Compliance
Export proceeds realisation: what a missed date costs you
What happens when payment is not realised in time, and how to see the dates before they pass.
Contents
- Every shipping bill opens a record with your bank. It stays open until the payment for it is received and matched.
- If it stays open past the allowed period, your bank must act, and your incentives can be taken back.
- The fix is simple: see every open shipping bill, with its due date, every week.
Every shipment opens a file
When you export goods, the shipping bill is reported to RBI's export monitoring system through your bank. From that day, the bank expects the full value of that export to come back to India within the period RBI allows.
When your buyer pays, the bank matches the payment to the shipping bill and closes it. If the payment is short, late or matched to the wrong bill, the record stays open.
The allowed period has changed more than once in recent years, and RBI has given temporary extensions at times of trade disruption. Ask your bank what applies to each of your shipments today.
What happens when the date passes
Your bank follows up. The bank must report open shipping bills that are past their date. You will be asked for reasons and evidence, and for an extension where the rules allow.
Your future exports can be affected. If too many bills stay open without good reason, an exporter can be placed on a caution list. Banks then treat new exports with more care, which can slow your business down.
Your incentives can be recovered. Duty drawback and similar benefits assume the export was paid for. If proceeds are not realised in time, the benefit you received can be recovered, sometimes with interest.
Your records stop matching. Your accounts may show the buyer as paid, while the bank's system shows the bill as open. Untangling this a year later takes far more time than matching it on the day.
Why bills stay open even when the buyer paid
Often the buyer did pay. The problem is the matching.
- One payment covers several shipments, and the bank does not know how to split it.
- The buyer paid a little less because of bank charges or a discount, and the difference was never explained.
- Payment came in through a different bank from the one that handled the shipping bill.
- Nobody sent the bank the details needed to match the payment.
Each of these is easy to fix in the week it happens. Each becomes hard after six months.
What good control looks like
You, or someone you trust, should be able to see a list of every open shipping bill, sorted by the date it is due. Next to each: the buyer, the value, how much has been received and what is still open.
Once a week, someone goes through the top of that list. Anything close to its date gets a call to the buyer or a note to the bank. Anything paid but still open is sent to the bank for matching.
That is all it takes. The difficulty is not the work. It is having the list at all.
How Expodite helps. Expodite starts each invoice's realisation clock from the bill of lading date and shows what is still unpaid and when it falls due. Each payment is entered once and split across the invoices it pays, including part payments. Bank extensions and eBRCs are recorded against the invoice, so nothing reaches its date unnoticed.
See realisation and eBRC in ExpoditeQuestions to ask your team
- How many shipping bills are open with our bank today, and what is their total value?
- Which ones are within two months of their date?
- Are any of them already paid by the buyer but not yet matched by the bank?
- When a buyer pays for several shipments together, who tells the bank how to split it?
- Has the bank written to us about open bills in the last year?
Quick answers
- What is export proceeds realisation?
- The receipt in India of the full value of goods you exported, matched by your bank to the shipping bill.
- What happens if export proceeds are not realised on time?
- Your bank reports the open bill and asks for reasons. Repeated delays can lead to caution listing, and incentives such as drawback can be recovered.
This article is general information for Indian exporters. It is not legal or banking advice. Check the current rules for each shipment with your bank.
