Documentary Collections check0 / 1 answered · 0 correct
Check 1
What usually comes before the seller sends documents to its bank in a collection?
Collection Procedure from Start to Finish
Follow a typical documentary collection lifecycle.
1. Contract
Buyer and seller agree documentary collection and whether D/P or D/A applies.
2. Shipment and documents
Seller ships, prepares documents and gives them to the remitting bank with a collection instruction.
3. Bank routing
The remitting bank sends the collection to the collecting/presenting bank, which presents according to instructions.
4. Payment or acceptance
For D/P, documents are normally released against payment. For D/A, they may be released against acceptance.
5. Remittance or maturity
Collected funds are remitted. Under D/A, the accepted item remains due at its later maturity.
Remember thisA collection procedure is a document-and-payment workflow, not a bank credit facility by default.
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