Collections

While the particular format of an Export and Import Collection can vary, the basic process is similar and brings advantages to Exporters and Importers alike.

If you are an Exporter, it makes sense to seek some security of payment when dealing with clients overseas, rather than risk non payment by trading on open account terms.

An Export Collection is one solution. It represents a simple and secure way to receive payment for sales abroad enabling you to use the banking system to keep control over the goods, as title documents are not released by the Bank, until payment or acknowledgement of the debt is received from the overseas buyer.

If you are importing goods an Import Collection may be the solution for you and is often the settlement method stipulated by the supplier. From an Importer's point of view, it is reasonably inexpensive and may also be used to negotiate improved credit terms.

Typically, Collections are used by parties in the early stages of a trading relationship. There are two types:

• 1. A Clean Collection which comprises of a financial instrument, normally a Bill of Exchange only.
• 2. A Documentary Collection which consists of a financial instrument together with other commercial documentation such as Bills of Lading, Invoices, Packing Lists.

Key Benefits

• Secure payments - Collections are more secure than open account trading, although payments are not guaranteed by a bank
• Simple and cost-effective - Collections are more straight forward and cheaper than Letters of Credit (L/Cs), although they are not as secure
• Worldwide standards - Collections are subject to the globally recognised guidelines issued by the International Chamber of Commerce, known as Uniform Rules for Collections (URC 522)
• Improved trading terms - can be used to negotiate improved terms of payment by the importer
• Convenience - we undertake the tracing of acceptance and payment

How does a Documentary Collection work?