Treasury & Forex Advisory · Question

What if my foreign buyer pays late after I have booked a forward contract?

Short answer

If the money arrives after your forward date, the contract and the receipt no longer line up, so tell your authorised dealer bank early. The usual choices are to cancel the contract and settle the difference at the going rate, or to extend it to a new date. Either may produce a gain or a cost, and the bank sets the terms.

In more detail

A forward is tied to a date. If your buyer's payment slips beyond that date, you still have a contract that must be dealt with, even though there is no inflow to deliver against it.

The general options are these.

Cancellation: the bank closes the contract at the prevailing rate. The difference between that rate and your original rate is settled in cash, in your favour or against you.
Extension or rollover: the contract is cancelled and a fresh one booked for a later date, so the new cover matches the delayed receipt. Pricing reflects current rates, so the rolled rate differs from the first one.
Early delivery or part delivery, where relevant, if funds arrive in instalments.

Banks generally expect you to act on or before the maturity date rather than after. Waiting in the hope the buyer will pay tomorrow can add costs and may also draw questions on how reliably you manage covers. Inform the bank as soon as you know a delay is likely, with whatever evidence you hold, such as buyer correspondence.

Regulation limits how many times, and under what conditions, contracts may be rolled, and these rules are set by the authorities and applied by the bank, so confirm the current position.

Repeated rollovers

Rolling again and again can accumulate costs and hide a deeper problem, such as a buyer who is struggling to pay. Treat repeated delay as a credit question, not only a currency one.

Next time, consider covering a slightly later window for buyers with a history of delay, or keeping some part of the exposure uncovered.

Key points

A late receipt leaves a forward with nothing to deliver against, which must be resolved.
Cancellation settles the rate difference in cash; extension books a fresh contract.
Contact the dealer bank before maturity, not after, with supporting buyer correspondence.
Rules limit repeated rollovers, so confirm current conditions with the bank.
Repeated delay may signal buyer credit trouble that needs separate attention.

Who this applies to

Exporters whose buyers sometimes pay after the agreed date.
Finance teams managing several forward contracts across many shipments.
Owners who booked cover but now face a gap between contract and receipt.

Last reviewed 3 October 2026

This answer is general information, not advice on your particular case. Terms, eligibility, and requirements change, so check the current position with the relevant institution or authority. Lalsar Holdings' financial advisory and financing work is advisory and facilitation only. Lalsar Holdings is not a lender. Sanction and disbursement of any credit facility is at the sole discretion of the partner bank, NBFC, or financial institution involved, subject to their own eligibility criteria and credit policy.