Incoterms (International Commercial Terms) are rules standardised by the International Chamber of Commerce (ICC) that define the responsibilities between buyer and seller in commercial transactions, especially international ones. Each term (EXW, FCA, CIP, DAP, DDP, among others) specifies who pays for what, where the risk transfers, and which documentation is each party's responsibility.
The choice of Incoterm significantly affects the total cost of a transaction, the timing at which the buyer 'owns' the goods (with accounting implications), and the risk of loss in transit. Common mistakes — using Incoterms for domestic transport where they do not apply directly, mixing terms from different versions (2000, 2010, 2020 have real differences), using terms misaligned with the mode of transport — generate expensive disputes.
MULTI records the Incoterm per purchase and sales document. The field is not cosmetic — it triggers automatic rules (who is responsible for transport, insurance, customs duties) and affects how the cost is composed. For customers with significant international operations, INFOS periodically reviews the Incoterms used versus recommended practices in the customer's industry.