Document collection

Definition of document collection

Document collection is a form of payment transactions in foreign trade. It includes among other things the confiscation of documents or bills of exchange, which on two types possible is:

Payment collection

When collecting payments, the exporter instructs his house bank to collect the equivalent value for the documents submitted from the debtor or to have it collected by a bank in his country.

Bill collection

When collecting bills of exchange, the documents are handed over to the importer against acceptance and the bill of exchange is presented to him on the expiry date. However, the bank is not liable for the correctness of the documents or their redemption. However, she is not allowed to hand over the documents before payment or acceptance.

The bank confirms the issuing of the collection order to the exporter and then sends it with the necessary instructions to the relevant correspondent bank abroad.

Features for both forms of document collection are:

  • Step-by-step business, whereby the exporter hands over the goods in return for documents
  • Involvement of credit institutions for payment processing
  • Agency order of the exporter according to § 675 BGB
  • The place of payment and performance are in the country of destination of the goods.

For the importer, the risk lies in paying for the goods prior to inspection and inspection. For the exporter, the risk lies in the refusal to accept or delayed acceptance of the documents. If the goods are not replaced by a goods paper, e.g. B. Bill of lading, embodied, the banks usually reject from a collection order. That is why most of the time a Letter of credit recommended.

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