Documentary collection is mainly used for collection in international trade. According to the different conditions of D/P, documentary collection can be divided into D/P and D/A.

Documents against payment

D/P means that the collecting bank submits documents to the importer on the condition that the importer pays.

For exporters, the advantage of D/P is that the shipping documents will be delivered only after the payment is made. If the bill of exchange is refused, the freight documents representing the ownership of the goods are still in the hands of the collecting bank, and the exporter still has the right to control the goods, so the risk is small.

According to the different payment time, D/P can be divided into three ways:

1, D/P at sight

In this way, the seller draws a draft at sight and presents it to the buyer through the bank. Buyers need to pay immediately after seeing it, and can't get the documents until they have paid off the payment. This method is also called "cash against documents".

2. D/P at sight (see days after bill date)

In this way, the seller draws a time draft, such as a 60-day time draft. The collecting bank submits the draft to the buyer, and the buyer only needs to "accept" the draft after reading it. The term "acceptance bill" means that the buyer guarantees payment 60 days after sight. After the bill expires, the buyer immediately pays to the collecting bank, which will hand over the documents to the buyer.

3. D/P place ... the day after tomorrow.

D/P at sight is almost the same as D/P at sight, but the difference is that the payment term of the former starts from the date of issue, while the payment term of the latter starts from the date of presentation of the draft.

Second, D/A (D/A)

Under the condition of D/A, the collecting bank can only hand over the freight documents to the drawee after the drawee has fulfilled the acceptance procedures of the forward documentary draft (that is, writing the word "acceptance" on the draft, indicating the acceptance date or adding the expiration date and signing it), without waiting for payment.

Under D/A, only time draft is used, and the calculation of maturity date of draft is divided into:

(1) D/A will be accepted ... days after the date of issue.

D/A ... A few days after sight.

(3) A few days after delivery, the date of bill of lading and … days after draft. The payment period of D/A usually ranges from 30 days to 150 days.

Financing and collection risk in collection business

First, the bank's financing in the collection business

Although collection belongs to commercial credit, banks can still provide financing to exporters and importers in many ways, which is one of the obvious differences between collection and remittance.

(1) Purchase collection bills.

Collection of export bills of lading refers to the way that exporters mortgage the bills of lading and other documents representing the right of goods to the bank, and obtain the advance payment with recourse from the bank after deducting the interest and expenses of the bill of lading; Or it refers to the behavior that banks have the right of recourse to buy documentary bills or complete sets of documents of cargo rights from exporters.

Collection of export bills is a short-term financing activity provided by banks to exporters. Based on this, exporters can recover the payment as soon as possible, speed up the capital turnover, and sometimes consider exchange rate changes, exporters can also avoid the risk of exchange rate changes, and banks can get handling fees and interest on drafts.

In export negotiation, the negotiating bank has the right of recourse. The recourse right of ordinary banks will be clearly stipulated in the negotiation contract. If the bank fails to recover the payment from abroad on time, it has the right to ask the exporter to return the financing principal and interest immediately.

The bill amount can be the full amount of export accounts receivable or a certain proportion of accounts receivable, which depends on the needs of exporters and the risk considerations of bill banks.

Export bills in collection business are very risky for banks. Such as exchange rate risk and credit risk of importers and exporters. Therefore, banks often have strict requirements for export bills collected, such as the importer's credit standing is good, the bill must be a full set of documents of cargo rights, and at the same time, higher interest and handling fees must be charged on the bill.

(b) Loans (advance collection)

The loan under collection is equivalent to part of the bill payment, but it is different from the bill. In the case of insufficient liquidity, the exporter may ask the collecting bank to issue a loan lower than the collection amount and repay the loan on the loan maturity date.

(3) Discounting financing (financing) with financing bills.

1. Export financing

Exporters can obtain financing by discounting financing bills. The specific process is as follows:

(1) The exporter issues a forward financing bill, the payee is the remitting bank, the exporter is the drawer and the payee, and the documentary collection bill is submitted to the remitting bank as collateral for the financing bill;

(2) The collecting bank sends the documentary draft to the collecting bank, and the entrusting collecting bank presents the documentary draft to the payer (importer) for acceptance;

(3) After the payer (importer) of the collection bill accepts the bill, the collecting bank sends back the acceptance notice to the collecting bank;

(4) After receiving the acceptance notice sent by the collecting bank, the collecting bank accepts the financing bonds by itself and sends them to the discount company for discount;

(5) The discount company posts financing bonds;

(6) The discount company will pay the net discount to the exporter;

(7) On the maturity date of the collection bill, the remitting bank receives the payment from the importer transferred by the remitting bank, and uses the payment to prepare the financing bill;

(8) On the maturity date of the financing bonds, the discount company prompts the collecting bank to pay the financing bonds;

(9) The remittance bank will pay the money prepared in advance to the discount company.

2. Importer financing

After receiving the notice from the collecting bank asking for payment, the importer can carry out financing. The specific process is as follows:

(1) The importer issues a forward financing bill to the collecting bank under the credit line, requiring the collecting bank to accept it;

(2) The collecting bank accepts the financing bonds;

(3) The importer sends the accepted financing bill to the discount company for discount;

(4) The discount company discounts the financing bills;

(5) The importer pays the discount of financing bills to the collecting bank;

(6) The collecting bank pays the collecting bank a net amount as payment;

(7) After the importer has sold the imported goods, it will deliver the payment to the collecting bank for preparing the financing draft;

(8) On the maturity date of the financing bonds, the discount company shall prompt the collecting bank to pay the financing bonds;

(9) The collecting bank will pay the payment received from the importer to the discount company.

(4) Trust receipt

In the D/P method, if the importer wants to deliver the goods before payment, he can open a trust receipt and give it to the collecting bank, so as to lend the documents for delivery and sales. After receiving the money, he will repay the money to the collecting bank in exchange for a trust receipt. This practice is called "D/P days after sight, issuing a trust receipt in exchange for documents",

The property right of the goods extracted from the trust receipt still belongs to the bank, and the importer is in the position of keeping the goods on his behalf, which is called the trustee or trustee.

Its obligations are: first, keep the goods under the trust receipt separately from other goods; Second, the sale money should be delivered to the bank or temporary bank for safekeeping, but it must be listed separately from its own funds in the accounts; Third, the goods shall not be mortgaged to others.

The collecting bank is the principal, and its rights are:

First, the trust can be revoked at any time to recover the lent goods;

Second, if the goods have been sold, you can recover the payment at any time;

Thirdly, if the importer goes out of business after borrowing goods, he has priority to the goods or payment.

Provide financial convenience to importers with trust receipts, which are generally proposed by importers and approved by collecting banks.

Collection risk

Documentary collection combines the delivery of freight documents representing the ownership of goods with the receipt and payment of loans. In addition to people's credit, there is also the guarantee of goods. Compared with the original remittance settlement method, it is still a commercial credit. The bank in the collection is only the general agent, and does not bear any expenses for all risks, expenses and accidents in the collection process. Whether the importer and exporter can get the payment stipulated in the contract or receive the stipulated goods on time depends on the credit status of the other party.

Generally speaking, documentary collection is a settlement method that is beneficial to importers and unfavorable to exporters. In collection, the importer also faces the risk that the goods mentioned in the voucher after payment or acceptance are not in conformity with the contract, or that the goods are inferior or counterfeit; But relatively speaking, the risk of exporters is greater, mainly in the following aspects:

1, market risk

After the goods are shipped, the price of imported goods falls, and the importer is unwilling to accept or pay the documents, so he may ask for a price reduction on the pretext that the specifications of the goods do not meet the requirements or the packaging is poor.

2. Country risk

Due to the political or economic reasons of the importing country, the importer can't get the import license, or can't apply for the foreign exchange needed for import, so that the goods can't be imported when they arrive at the importing place, or the importer has no foreign exchange payment. 3. Importer risk

Due to bankruptcy or closure, importers are unable to pay for the goods.

4. General risks

In some regions, such as Latin America, D/P is traditionally regarded as D/A, that is, the importer will hand over D/P to the importer immediately after accepting the D/P draft. In this case, exporters face the risk that both wealth and goods will be hollowed out.

Problems that should be paid attention to in using the method of collection in practice

Although collection will bring many risks to exporters, sometimes it is still used to enhance market competitiveness and expand exports, especially when promoting unsalable products or new products.

Therefore, in order to prevent risks in the process of collection and ensure timely recovery of payment, exporters should pay attention to the following matters:

(a) in-depth investigation of the importer's credit, and then determine whether the collection method can be used and the credit limit that should be mastered.

(two) choose the collecting bank carefully.

(3) the choice of price conditions.

(4) The method of bill of lading.

(5) Types and quantities of collection documents.

(6) Pay attention to the trade laws, foreign exchange regulations and bank habits of the importing country, so as not to affect the timely collection of foreign exchange.

(seven) send a copy of the document to the customer in time, so that it can take the initiative to contact the collecting bank and pay the redemption instruction in time.

(8) In the process of collection, the exporter should always keep close contact with the collecting bank, improve the collection bill and account inspection system, and understand the acceptance and payment of the importer. If it fails to pay due, it will intensify the collection.