When you export goods and services, you would like to have the assurance that your delivery will be paid – on the other hand, you want to minimize the administrative effort and income-reducing costs associated with this payment security. That is why documentary collection is a popular and proven middle course between costs and security.
Documentary collection provides more security than a delivery with open-account payment terms. It does not cover all risks, however – the buyer, for example, may refuse to accept the documents. In addition, the liability of the participating banks is limited to the forwarding and delivery of the documents against payment; political and credit risks are not covered.
That is why we recommend using documentary collection only if the business partners trust each other, if there is no doubt about the buyer's willingness to pay, and if stable conditions prevail in the import country.
Documentary collection or documentary credit?
Does documentary collection offer enough payment security or would a documentary credit ultimately be a better solution? How stable are the political, economic and legal conditions in the import country? Which form of documentary collection is most suitable? We would be glad to analyze your situation, recommend the optimum solution and open the right documentary collection (or documentary credit) for you.