There are three elements to the balance of payments. These are the current account, the capital and financial account and net errors and omissions.
They are: trade in goods, trade in services and income and current transfers.
Trade in goods
Sometimes referred to as the visible balance, measures the earnings gained from exports and the expenditure spent on imports of products.
The trade in services
It is identical to the trade in goods except that it concerns exports and imports of services, the invisible balance. These include products such as insurance and tourism.
Income and transfers
It is the transfer of money from government and individuals internationally. This may arise from individuals setting up bank accounts in other countries or immigrants sending incomes back to relatives in their origin countries.