Documentary Collection

Documentary Collection involves banks facilitating payment collection from buyers in exchange for shipping documents. This process includes Documents Against Payment (D/P) and Documents Against Acceptance (D/A).

Banks act as intermediaries during the transaction. They present shipping documents to buyers and collect payments or acceptances.

Documents Against Payment (D/P) require buyers to pay before receiving shipping documents. Documents Against Acceptance (D/A) allow buyers to accept a time draft before receiving documents.

Sellers rely on banks to ensure secure transactions. Banks verify documents and manage collections, reducing risks for both parties.

Examples of shipping documents include bills of lading, invoices, and insurance certificates. These documents ensure that buyers receive the agreed-upon goods before making payments.

In Documentary Collection, strict adherence to terms safeguards both buyers and sellers. This method guarantees that shipping documents correspond with the buyer’s payment or acceptance, securing the trade process effectively.