Documentary collection is a method of receipt the payment for goods against financial and/or shipping documents using bank as an intermediary.

The seller instructs his bank to forward documents evidencing delivery of goods to the buyer's bank with a request to release the documents to the buyer only after payment has been made ("Documents against Payment") or payment undertaking has been given - the buyer has accepted a bill of exchange issued by the seller and payable at maturity date ("Documents against Acceptance").

Besides, the involved banks do not assume any payment obligations. Their liabilities are only to execute customers' instructions, i.e. to release the documents against payment, acceptance or other terms.

It is advisable to use documentary collections

• if business partners know each other, but no so far that to operate on the "open account" (for seller) or advance payment (for buyer) basis;
• if the seller has no doubts about the buyer's ability to meet payment obligation;
• if the political, economical and legal situation in the buyer's country is stable.

How advisably using of documentary collection for the buyer and the seller?

For the seller: it is a guarantee that the buyer will only receive goods after the payment or written payment obligations are made (accept of Bill of exchange).

For the buyer: it is a guarantee that goods are delivered, and having made payment (or accept) the buyer will receive the specified documents for goods receiving.

In regards to the documentary collections related transactions, JSC SMP Bank offers to its customers servicing as a buyer's bank as well as a seller's bank.

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