Documentary collections

What are documentary collections?

Documentary collections are a safe and, not least, effective form of settlement. Shipping documents are sent to the buyer’s bank and are only delivered to the buyer when the collection amount is paid.
Immediately after the seller has shipped the product in question, the seller will send the agreed documents through their bank to again present them for payment at the buyer’s bank.
The buyer only receives the documents after the invoice amount has been paid in full, or through an exchange (a promise of payment at a later date).

Documentary collections are used when:

• the exporter and importer know each other;
• there is no doubt about the importer’s willingness to accept and pay for the goods;
• there are stable political, financial and legal conditions in the country of import;
• the country of import follows international payment standards and is not threatened by trade and currency restrictions.