Documentary collection refers to a set of documents pre-arranged between the parties and sent to the importer's bank by the exporter's bank.
Documentary collection can be:
- Export documentary collection where the Seller/exporter is responsible for presenting the documents to the bank with the instruction for payment under the documentary collection. If the products/goods have already been produced and shipped without prior agreement, the collection is a limited instrument for payment.
- Import documentary collection where the Buyer of the goods or services is the beneficiary of the documentary collection. When the documents are at the beneficiary's bank, they are informed about this by the bank. The beneficiary will have information about the documents, analyze them and after the payments are reflected, the documents will be forwarded to the beneficiary.
