K&H documentary collection
a classic international payment arrangement whereby the exporter submits the shipping documents along with a collection order for prompt or deferred payment
- this payment method offers less security than a letter of credit but is simpler and less expensive
- the involvement and influence of the Bank improves importers’ willingness to pay
- it is not necessary to place the funds at the Bank’s disposal in advance
details
While documentary collection is not a banker’s security, the involvement of banks in the process improves the chances for a successful collection of the receivables.
| types of documentary collection | |
|---|---|
|
if the client does not enclose the commercial documents with the payment documents |
“clean” collection |
|
if the client encloses the commercial documents with the payment documents |
documentary collection |
|
if the seller delivers directly to the buyer’s address when shipping the goods |
open collection |
|
if the buyer obtains a right of disposal over the goods only upon paying the collection amount |
vinculated collection |
|
if the buyer pays when the documents are presented |
D/P (documents against payment) collection |
|
if the Bank releases the documents against the buyer’s promise for deferred payment (bill of exchange) instead of the payment of cash |
D/A (documents against acceptance) collection |
who might be interested?
- those having incomplete information regarding their trading partners
- sellers who need a payment method that is more secure than a simple bank transfer
- those who export to politically and economically stable countries
crystal-clear services – export collection
transparent, reliable and accurate payments
- processing collection orders the same day - the Bank will process the incoming export documentary collection orders and forward them, along with the necessary documents, to the foreign buyer’s bank on the day of submittal if the order and the documents are received by the Bank’s Documentary Unit by 12 noon. The Bank pays compensation if performance is delayed due to some error on its part.
- processing payments received in either 24 hours
- customised expediting procedures
