The balance of payments has been an important indicator of the growing economic activities in all the countries. It reflects how much a country is technically developed and competitive in the world market. Balance of payments is the statistical record of all transactions taking place between its residents and the rest of the whole world. There are three analytical approaches to the balance of payments namely; the elasticities approach, the absorption approach and the monetary approach. There are many factors that determine the position of balance of payments in the country either it is surplus or deficit. This study highlights these multi-factors for the developing countries and mainly focused on Pakistan. The statistically the balance of payment position of Pakistan is analyzed and use full policy measures are suggested. These policy measures may be helpful to improve balance of payments position in Pakistan and in other developing countries.