Overview

This article provides a comprehensive guide to understanding, setting up, and using Incoterms and Named Place in iVendNext.

1. What are Incoterms?

Incoterms (International Commercial Terms) are a set of 11 standardized trade terms that define the responsibilities of buyers and sellers in international transactions, including the transfer of goods, risk, and costs.

Incoterms are published by the International Chamber of Commerce (ICC) to define the responsibilities of buyers and sellers in international transactions, including:

• Delivery of Goods: When and where the goods are delivered.

• Transfer of Risk: When the risk of loss or damage to the goods transfers from the seller to the buyer.

• Cost Allocation: Which party is responsible for shipping, insurance, and other costs.

Common Incoterms

• EXW (Ex Works): The seller makes the goods available at their premises, and the buyer bears all costs and risks from that point.

• FOB (Free on Board): The seller delivers the goods on board the vessel at the port of shipment, and the buyer bears all costs and risks from that point.

• CIF (Cost, Insurance, and Freight): The seller delivers the goods on board the vessel at the port of shipment and pays for insurance and freight to the port of destination.

• DDP (Delivered Duty Paid): The seller delivers the goods to the buyer’s premises, bearing all costs and risks, including import duties.

2. What is a Named Place?

The Named Place is the specific location agreed upon by the buyer and seller where the obligations and responsibilities under the Incoterm are fulfilled. For example:

• In FOB (Free on Board), the Named Place is the port of shipment.

• In CIF (Cost, Insurance, and Freight), the Named Place is the port of destination.

The Named Place is critical because it determines which party is responsible for various tasks and costs associated with the transaction.

3. Why Use Incoterms and Named Place in iVendNext?

Using Incoterms and Named Place in iVendNext offers several benefits:

• Clarity in Transactions: Clearly define the responsibilities of buyers and sellers, reducing the risk of disputes.

• Accurate Cost Allocation: Ensure that costs (e.g., shipping, insurance, duties) are allocated correctly between parties.

• Compliance with International Standards: Use globally recognized terms to comply with international trade regulations.

• Improved Record-Keeping: Maintain accurate records of Incoterms and Named Place for future reference and audits.

4. Setting Up Incoterms and Named Place in iVendNext

To use Incoterms and Named Place in iVendNext, you need to configure them in your sales and purchase transactions. Follow these steps to set them up:

4.1 Prerequisites

Before setting up Incoterms and Named Place, ensure that the following are in place:

• Incoterms List: Ensure that the Incoterms you plan to use are available in the system.

• Named Place: Define the specific locations (e.g., ports, warehouses) that will be used as Named Places.

4.2 Step-by-Step Guide to Setting Up Incoterms and Named Place

1. Navigate to Sales or Purchase Transactions:

• Go to Home > Selling > Sales Order or Home > Buying > Purchase Order.

• Create a new Sales Order or Purchase Order.

2. Select the Incoterm:

• In the transaction form, locate the Incoterm field.

• Select the appropriate Incoterm from the dropdown list (e.g., FOB, CIF, DDP).

3. Enter the Named Place:

• After selecting the Incoterm, the Named Place field will become visible.

• Enter the specific location where the Incoterm obligations will be fulfilled (e.g., port of shipment for FOB).

4. Save and Submit:

• Save the transaction and submit it for processing.

5. Using Incoterms and Named Place in Transactions

Once Incoterms and Named Place are set up, they will be used in various stages of the transaction, including:

• Sales Orders: Define the responsibilities of the seller and buyer in sales transactions.

• Purchase Orders: Define the responsibilities of the buyer and supplier in purchase transactions.

• Invoices: Ensure that costs are allocated correctly based on the Incoterms.

5.1 Example: Using FOB in a Sales Order

• Incoterm: FOB (Free on Board).

• Named Place: Port of Shanghai.

• Responsibilities:

• The seller is responsible for delivering the goods on board the vessel at the Port of Shanghai.

• The buyer bears all costs and risks from the point the goods are on board the vessel.

6. Key Features of Incoterms and Named Place in iVendNext

6.1 Standardized Incoterms

• iVendNext supports all 11 Incoterms, ensuring compliance with international trade standards.

6.2 Named Place Flexibility

• You can define any location as the Named Place, depending on the transaction requirements.

6.3 Integration with Transactions

• Incoterms and Named Place are integrated into Sales Orders, Purchase Orders, and Invoices, ensuring accurate record-keeping and cost allocation.

6.4 Reporting and Compliance

• Use iVendNext’s reporting features to track transactions based on Incoterms and Named Place, ensuring compliance with international trade regulations.