Documentary collection is a commonly used method of payment in international trade available to both importers (buyers) and exporters (sellers). Documentary collections assume that the seller presents shipping documents via their bank after shipment of goods, with instruction to send documents to buyer’s bank on a collection basis and clearly instructing whether shipping documents are to be released to the buyer either against payment or against acceptance of a deferred payment bill.
Protect your bottom line by retaining control of goods until payment is received or promised without a formal documentary credit. Usually used instead of documentary credit, where an exporter has established an element of trust and relationship with his importer. You will be able to reduce the risk of non-payment by controlling shipping documents via bank channels.