How can documentary collections help your business?
- The collecting bank is acting as an Agent in handling the documents and payment on behalf of the exporter
- The shipping documents stay in the banking system until the collection has been paid or accepted
- The exporter’s bank monitors whether the payment is made or accepted
- It is a simple and flexible method of receiving payment using the international banking system
- Documentary collections are governed by International Chamber of Commerce rules – ICC Publication No. 522 and they can help to reduce disputes between the importer and exporter
Potential risks to be aware of when using documentary collections
- Documentary collections do not guarantee payment
- Payment is not made until the goods are shipped and there could be a risk of non-acceptance and non-payment of documents by the importer
- If goods are addressed to the importer, with the exception of bills of lading, the importer can obtain the goods without presenting the transport documents
- If the importer fails or delays payment, the exporter could incur additional costs associated with non-delivery of the goods for example storage/demurrage costs
What is the process for documentary collections?
- A contract is agreed between the importer and exporter stating the method of payment is a documentary collection.
- The exporter ships the goods and presents the documents, for example bills of lading and invoices, to their bank with instructions for collection of payment.
- The exporter's bank sends the documents and the collection instructions to the importer's bank.
- The importer’s bank will request payment on either immediate presentation of the collection (sight payment) or on the importers acceptance of a Bill of Exchange (draft) agreeing to pay an agreed amount on a determinable future date.
- The importer authorises payment and their bank will then process the payment.
Collections are subject to The Uniform Rules for Collections issued by the International Chamber of Commerce.
Please refer to our Fees and service charges explained – foreign payments leaflet for important information on the Trade Finance charges.
Ready to apply?
If you are an existing Danske Bank business customer, you can complete the documentary collection form through District, our online banking platform or download the documentary collection forms.
These documents should be completed and returned to:Danske Bank, Trade Finance,
Donegall Square West,
We're here to help
We have a team of specialists, skilled at making more possible for local businesses through our trade finance solutions.
If you are an existing Trade Finance customer, you can speak to one of our Trade Finance specialists
Telephone: 028 9004 8133
Calls may be recorded. Lines are open between 9am and 5pm Monday to Friday except for bank holidays or other holidays in Northern Ireland when the bank is not open for business.