A real story that could help your export business too
As Chartered Accountants, we're usually expected to crunch numbers. But for our clients, we often become sounding boards, problem-solvers, and strategic advisors-especially for exporters navigating the ever-evolving banking landscape.
Let me share a real story that many of you in the export business will relate to.
Which Bank Should I Open My Account With?
That was the very first question my client asked.
She had just started her bulk B2B export business and wasn't sure if she should go with a government bank, a private bank, or both.
Our suggestion was simple but strategic: Open current accounts in both - one government, one private.
- Private banks were smoother with forex transactions and online banking tools.
- Government banks came in handy for things like demand drafts, tender filings, and lower service charges.
No endorsements here, but in our experience, a mix works best, especially in today's unpredictable business environment.
As for branch selection, we told her: "Choose the branch closest to where you actually work. You'll thank us later." (And she did!)
The AD Code Confusion
Next up: the AD Code.
We ensured she got it from both banks-but more importantly, we made it a practice to mention the correct AD Code on every invoice, aligned with the account where the remittance would arrive. It's a small detail, but critical to ensure smooth fund transfer and compliance.
Miscommunication with Foreign Buyers
Her overseas buyers were ready to pay but unclear which bank to send the money to.
That's when we stepped in and created a standard format of communication for all customers, ensuring no ambiguity in remittance instructions. It saved a lot of back-and-forth emails and prevented payment delays.
The Forex Booking Mess
Then came a nightmare.
She started using the bank's online portal to book forex rates herself-something the bank had proudly taught her. But no one told her this:
Even if you book the forex deal yourself, the documents still need to be submitted manually to the bank.
Result? Several transactions got stuck. Some documents were delayed, and the bank began levying penalties. She was overwhelmed. A new exporter trying her best but caught in the web of incomplete instructions.
Here's What We Did
We met the bank manager face to face. Together, we created a complete checklist of documents required for each foreign inward remittance.
Even more surprisingly-while reconciling the past dues-we found several mistakes on the bank's part. They were simply blaming the exporter for everything.
Once we knew the full picture, we:
- Documented every required form, invoice, airway bill, etc.
- Designed a neat folder structure physical and digital
- Ensured every remittance came with a cover letter and confirmation from the bank
Knocking Off - The Most Forgotten Task
If you're an exporter, you've probably heard of "knocking off"-linking each remittance to the right invoice and shipping documents, as mandated by RBI.
But most businesses don't track this until it's too late.
We built a simple but powerful Excel sheet for her to log:
- Shipping bill numbers
- Invoice details
- Airway bills
- AD Code used
- Date of remittance
- And the status of knocking off
This sheet is now shared with the bank proactively and saves her hours of stress every month.
The Bigger Picture
This wasn't just about banking or documentation.
It was about creating a system - a process exporters can follow without chasing the bank or getting blindsided by penalties.
This is one of many such stories we come across in our work. Each client's situation is different, but the core need is the same: Reliable guidance + Practical systems = Peace of mind
If you're in exports and tired of fighting these battles alone, know that you're not alone. I will post more such articles on practical scenarios that might help you deal with your issues.
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