How document against payment works in international trade procedure

During an international trade procedure, the importers country acts on behalf of an exporter for receiving and sending money for shipment. Many companies facilitate international trade transaction by offering a documentary collection facility. Under this contract, the suppliers know that documents will be released to the importer by document against payment.

Document against payment

In this article, we will discuss the document against payment. So let's start.

Documentary collections are of two types:-

  • Document against payment (DP) – Sight Documents
  • Document against acceptance (DA) – Term Documents

According to this service the documents of shipping are sent to the beneficiary bank which in turn to be delivered to the party based on the instruction.

The documents are sent to the buyer in exchange of Document against payment as per the terms of payment.

Many traders are able to procure goods without making any payment in advance unless the goods are delivered by the seller.

Import documentary collections

It helps the exporter to provide documents with their bank.  Import Documentary Collections are a simple and cost-effective alternative to Import Letters of Credit. You can:

  • Regulate collection and transaction in multiple currencies
  • Centralize import payable data
  • Getting electronic notification when import documents arrive
  • Simplify the administration of commercial trade transactions
  • It guarantees your trading partner of prompt remittance of payment

Export Documentary Collections

When an enterprise uses documentary collection as a way of payment, the importer's bank has to regulate the goods through the help of shipping documents that give access to goods. The documents should be sent to the buyer when someone has given the amount or signed a bill of exchange. You should note that banks have no payment facility in documentary collections.

Find a reputed financial company

RNR Trade Corporation Company Limited (RNR) is a Non-Bank, Trade and Financial Company that has been established for over 20 years. The company has been engaged successfully in trading business activities for many years. This skilled knowledge base and experience has complimented their clients very effective in managing various kinds of trade credit financial services. The company provides services such as a letter of credit, Document against payment, bank guarantee, proof of funds documents and much more. If you want any financial assistance then visit rnrtradecorp.com to get more significant information.

Location: Bangkok, Thailand

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