Documentary Collections

• Documentary Collection is a payment term that could be considered when a seller requires more security than afforded by open account terms, but when the low value of the order prohibits the use of a letter of credit.

• No advance set-up, however you must know your Buyer's Bank Account Detail

• Seller despatches goods and presents documents to his own bank

• Seller's Bank checks presentation of documents with respect to quanitity of documents only (i.e. as per listed on submitted Bank Documentary Collection Form)

• Documents are forwarded to Buyer's Bank Overseas

Payment of Documentary Collection

• D/P - Documents Against PAYMENT:
  
  SIGHT DRAFT : Once Sight has taken place (i.e Buyer has signed the Sight Draft at his bank) then Buyer receives the document set from his bank, and Buyer's Account is debited, and Seller's account is credited

• D/A - Documents Against ACCEPTANCE:
  
  TERM DRAFT, Once ACCEPTANCE has taken place (i.e. buyer has signed the Term Draft at his bank) then Buyer receives the document set from his bank, and MATURITY date is established, upon which time the Buyer's Account is debited, and Seller's account is credited.

• The Tenor (i.e.Deed of Time) of Term Drafts must be FIXED or DETERMINABLE, examples could be
  - 30 days after Sight
  - 60 days after Invoice Date (Invoice date xx-xx-xx)
  - 120 days after AirWay Bill date (Airwaybill date xx-xx-xx)
  - Due on date xx-xx-xx