Incasso

 

Description

 When to apply Documentary Collection

 You are a seller (exporter) and

  • You are ready to deliver the goods prior to payment by the buyer (importer),
  • You are sure that the buyer will pay for the goods delivered in compliance with the initial arrangements,
  • However, you are willing to control the payment for the goods, mitigate the possible risks and avoid the difficulties which may occur in relation with the failure by the buyer to make the payment or to make it in timely manner.

 

ACBA CREDIT AGRICOLE BANK recommends applying documentary collection.

Documentary collection is the instruction of the seller (exporter) to the Bank to transfer the document to the buyer (importer) at its expense against the payment and/or acceptance of payment.

Moreover, the Bank does not assume any payment obligation, and acts in the capacity of intermediary/document forwarder.

 

Types

Export Documentary collection

You deliver the goods to the buyer, and submit the delivery documents to the Bank with the corresponding instruction to charge the payment for goods from the buyer. The delivery documents may be submitted to the buyer either against the full payment or acceptance of the written document on deferred liability (promissory note).

 

Import Documentary collection

The exporter delivers the goods to you and instructs your bank to submit delivery documents to ACBA CREDIT AGRICOLE BANK instructing to charge the payment. The delivery documents may be submitted to you either against the full payment or acceptance of the written document on deferred liability (promissory note) by you. On the conditions agreed preliminarily, the Bank may guarantee the payment of the accepted promissory note by you through aval.

 

Payment modes for Documentary collection

There are two modes of payment of Documentary collection, which are usually established within the terms and conditions of commercial contract.

  • Documents against payment (D/P) – Within the scope of Documentary collection, the Bank submits the documents issued by issuing bank to the debtor against the payment. In case of this mode of Documentary collection the bank of the seller authorizes the buyer’s bank to submit the documents on the ownership of the goods to the buyer only upon making the payment against the goods by the latter,
  •  Document against acceptance (D/A) - Within the scope of Documentary collection, the Bank submits the documents issued by issuing bank to the debtor against acceptance by the latter the promissory note. This mode of Documentary collection is applied when between the seller and the buyer there is an agreement on deferred payment.  The buyer receives the documents on ownership to the goods against a written document on assuming liabilities, on the condition that the payment against those goods will be made later.  

 

Advantages

 The advantages of export Documentary collection

  • It is more safe way to receive the payments, particularly in case of overseas shipping, when the original bills of lading are not provided to the buyer unless the latter makes the payment or accepts the promissory note.
  • It is possible to require a guarantee of payment of the promissory note accepted by the buyer.
  • It is often used as an alternative to letter of credit, when the relationships between the buyer and the supplier are based on sufficient trust.

 

Advantages of import Documentary collection

  • You can make the payment against the goods or accept the payment obligation after getting acquainted with the delivery documents.
  • The level of complexity and documentation of the transaction is reduced, which often results in relatively low banking tariffs.
  • In case the corresponding requirements are met the Bank is ready to fund your transaction.

 

Terms and conditions

 The Bank accepts the instruction of client, RA resident legal entity or private entrepreneur to implement and service the client Documentary collection, as well as the  Documentary collection instructions received from other bank(s) in the name of Bank clients, RA resident and non-resident legal entities or private entrepreneurs.

The Bank implements calculations of Documentary collection in AMD and foreign currency, depending on the transaction currency.  

 

FAQ

 The cases, when it is more expedient to use Documentary collection, instead of letter of credit.

 - It is expedient to use Documentary letter of credit when the buyer and the seller do not know each other and the seller is not sure of solvency of the buyer, and the buyer is not sure if the supplier would deliver the goods. In case of Documentary collection the seller and the buyer know each other and the seller is sure that the buyer will make the payment against the documents submitted.

 Is it possible to get funding in case Documentary collection transaction is carried out?

 - It is possible to get funding in the process of Documentary collection transaction through discounting the promissory note. Discounting the promissory note on deferred payment, the Bank pays the client/buyer the nominal value of the promissory note discounted in the amount of corresponding discount rate.

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