Protects your interests if your buyer does not issue Documentary Credits (DCs).
Puts you in a position to negotiate better terms and prices
Other Benefits
Simple and cost effective
Documents and payment collections are handled on your behalf
It's easier and cheaper for buyers to receive Documentary Collections than to issue DCs
Reduces disputes as Documentary Collections are governed by URC522 which clearly defines the responsibilities of different parties, along with interest and expense issues
Access to HSBC's international network makes it easier to chase outstanding payments
How Documentary Collections Work
Because payment is not made until after the goods are shipped, you bear the risk while goods are in transit or storage until payment or acceptance takes place.
The banks involved in the transaction do not guarantee payment
If you require a guarantee of payment from your buyer’s bank then you need to request for an avalisation from them.
Always check a buyer's credit status and reputation before agreeing to a Documentary Collection.
