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Documentary Collections

Documentary Collections

A more secure trading method than Open Account/Payment in Advance terms

  • Offers a simple and cost-effective means of trading while reducing your risks
  • Positions you to receive better terms/prices as it is easier and cheaper for your buyer to receive Collections than to issue DCs
  • Protects your interests when your buyer will not issue DCs, as you retain control of your goods through the banking system until your buyer pays or promises to pay the bill Reduces disputes as Collections are governed by URC522, where responsibilities of different parties, interest and expense issues are clearly defined
  • Improves efficiency through access to HSBC's international network to help you chase outstanding payments


  • Is your business looking for payment security without the use of a Documentary Credit? If the answer is yes, then our Documentary Collection service is the right alternative for you.

 

How do collections work?

Documentary Collections, otherwise known as Bills for Collection, involves the banks of both the buyer (drawee) and the seller (drawer) acting as collectors of funds. Once you have shipped your goods and obtained the necessary documents, you can simply pass the documents to us together with your instructions for payment (collection order). We (remitting bank) will then instruct the buyer's bank (collecting/presenting bank) to deliver your documents according to your instructions.

 

There are two types of Documentary Collections:

Documents against Payment (D/P) terms - documents will only be released against buyer's payment of the bill amount. Documents against Acceptance (D/A) terms - documents will be released against buyer's promise to pay at a later date (i.e. acceptance of the term bill).

 

Protecting your interests

Your interests are protected in that the goods, through control over the title documents, are only handed over to the buyer against payment or a promise to pay. However, Documentary Collection procedures still entail risks for you (seller) because payment is not made until after the goods are shipped. That is, you assume risk while the goods are in transit or in storage until payment or acceptance takes place. You should also note that the banks involved in the transaction do not guarantee payment. As such, you should always check on the buyer's creditworthiness and reputation before agreeing to a Documentary Collection, especially D/A terms.

 

Size Matters

With HSBC's global network of some 7,000 offices in 81 countries and territories, most collections can be directly dispatched to one of our branches. By using one network, you benefit from consistent operational and procedural standards which ensure prompt payment. Also, with established service standards, we keep you up-to-date with the latest status of the bill and monitor collections on your behalf so that you get paid as soon as possible.

Need more information?

For further information, please call our Customer Service Centre on 4 4722 24 or stop by at your nearest HSBC branch.You could also contact us via e-mail.