PAYMENT METHOD: BILL FOR COLLECTION

Documentary Collections : A documentary collection (D/C) is a transaction whereby the exporter entrusts the collection of a payment to the remitting bank (exporter’s bank), which sends documents to a collecting bank (importer’s bank), along with instructions for payment. Funds are received from the importer and remitted to the exporter through the banks involved in the collection in exchange for those documents. Document can either be delivered to the importer against payment at the sight (D/P) or against the acceptance of a Bill of Exchange (D/A) tenured for 30 to 180days or more.

1. Exporter and Importer sign the purchase contract
2. Exporter ships the goods to the Importer
3. Exporter forwards shipping documents to its Bank
4. Exporter’s Bank forwards shipping documents to the Importer’s Bank
5. Importer’s Bank release the shipping documents to the Importer
6. Importer pays its Bank for the goods in exchange for documents received
7. Importer’s Bank transfers the funds to the Exporter’s Bank
8. Exporter’s Bank pays the Exporter
9. Importer clears its goods using the shipping documents

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1. Exporter and Importer sign the purchase contract
2. Exporter ships the goods to the Importer
3. Exporter forwards shipping documents to its Bank
4. Exporter’s Bank forwards shipping documents to the Importer’s Bank
5. Importer’s Bank release the shipping documents to the Importer
6. Importer clears its goods using the shipping documents
7. Importer pay its Bank for the goods already cleared
8. Importer’s Bank transfers the funds to the Exporter’s Bank
9. Exporter’s Bank pays the Exporter