Documentary Collections


Cost effective way to expedite payment processing or collections for the exchange of goods

A documentary collection (D/C) is a trade transaction in which the exporter hands over the task of collecting payment for goods supplied to his or her bank, which sends the shipping documents to the importer’s bank together with payment instructions.

A D/C is when the exporter receives payment from the importer in exchange for the shipping documents, with the funds and documents channeled through their respective banks. Shipping documents are required for the buyer to clear customs and take delivery of goods (commercial invoice, certificate of origin, insurance certificate, packing list, bill of exchange etc.). While D/Cs are less complicated and cheaper than letters of credit, they are riskier for exporters because they do not have a verification process and offer limited recourse if the importer does not pay. They are therefore only recommended in situations where the exporter and importer have a long-standing trade relationship.

Export Documentary Collections

  • Expedite processing while maintaining control over the transfer of shipping documents, goods and funds.
  • Documents and payments are controlled by intermediary banks until payment is made or draft is processed. Park Bank acts on your behalf in an Export Documentary Collection.

Import Documentary Collections

  • Expedite and assure the proper processing and delivery of documents to you and of your payments to the supplier.
  • Park Bank and the exporter’s/supplier’s bank act as intermediaries in the collection of trade payments.

A closer Look at the Documentary Collection Process

  • Risks do exist such as having little recourse against the importer in case of non-payment. Credit, political and transfer risks, for instance, are not covered. Although banks do act as facilitators for their clients under collections, documentary collections offer no verification process and limited recourse in the event of non-payment.
  • The exporter entrusts the collection of a payment to the remitting bank (exporter’s bank), which sends documents to a collecting bank (importer’s bank), along with instructions for payment.
  • A draft requires the importer to pay the face amount either at sight (document against payment [D/P] or cash against documents) or on a specified date (document against acceptance [D/A] or cash against acceptance).
  • The draft gives instructions that specify the documents required for the transfer of title to the goods. Although the title to the goods can be controlled under ocean shipments, it cannot be controlled under air and overland shipments, which allow the foreign buyer to receive the goods with or without payment.
  • Funds are received from the importer and remitted to the exporter through the banks in exchange for those documents.
  • Although the banks control the flow of documents, they neither verify the documents nor take any risks. They can, however, influence the mutually satisfactory settlement of a documentary collection transaction.

For more information about Documentary Collections, contact our Treasury Management specialists at 414.466.8000.