What are the advantages and disadvantages of the collection method?

Advantages: Improve the competitive mode of exports, and under the same conditions, exporters must give preference to the international settlement method of collection.

Cons: 1The risk is high, because the exporter ships the goods first, and if the importer refuses to pay, even if the property documents are still in the hands of the exporter, the goods can be stranded at the other party's port and backlogged, and the freight and bank costs of returning home are not small losses.

2.Deliver the goods first, and then collect the money, resulting in the exporter's capital turnover difficulties, and for the importer, especially in the form of documents against acceptance, it is equivalent to using the money received from the sale of goods to pay the exporter's payment, which is equivalent to helping the importer finance.

3.It is affected by the politics and national policies of the importer.

In short, it is necessary to be very cautious when choosing the collection method for international settlement.

Collection is a settlement method in which the exporter issues a bill of exchange, entrusts the bank to collect the payment, and collects the payment for goods or services from the foreign importer.

There are four parties to the collection, and the main responsibilities are as follows:

1.The principal, also known as the drawer, is generally the exporter, mainly to exercise the terms of the contract signed with the importer and perform the contract signed with the bank for entrusted collection.

2.A remitting bank, also known as a collection bank, is a bank that entrusts the collection of money, mainly in accordance with the requirements of the principal and international practices to handle business.

3.Collecting Bank The collecting bank is the bank that collects money from the payer according to the power of attorney of the collecting bank.

4.The drawee is generally the importer. Mainly the people who make the payment.

1. LC: It is guaranteed by bank credit, and the issuing bank has the first payment responsibility, as long as there is no discrepancy in the documents submitted for negotiation, the bank must unconditionally pay the full amount within n days after seeing the order, regardless of whether the applicant (buyer) wants the goods.

2. DP is a document against payment. After delivery, we prepare the negotiation documents and hand them over to the customer's bank through our bank. The customer's bank will remind the customer that the documents have arrived, and the goods will be shipped after the customer has paid.

3. DA is the document of acceptance, which also refers to the submission of documents to the customer's bank through our bank. The difference is that customers only need to accept our documents, they can take the original documents, and pay when due.

4. TT is a telegraphic transfer (the documents are generally mailed directly by us to customers without a bank). If we use the telegraphic transfer payment method for the customer, the general practice is that the customer pays 30 in advance, and the other 70 in general insurance is that after the goods are loaded on the ship, the customer pays with the original bill of lading faxed by us, and then mails the whole set of original documents. Sent to the customer upon receipt of payment.

Collection refers to a settlement method in which the exporter issues a bill of exchange with the importer as the payer, and entrusts the exporter's bank to collect the payment from the importer through its branch or bank on the importer. Collection is a commercial credit, and when the bank handles the collection business, it does not have the obligation to check whether the shipping documents are correct or complete, nor does it assume the responsibility that the person who pays the hail sail must pay. Although the collection is handled through the bank, the bank only acts as the trustee of the exporter and does not bear the responsibility of payment, and the importer's non-payment has nothing to do with the bank.

Payment and Settlement Measures" Article 190 Collection. After the goods are delivered in accordance with the signed purchase and sale contract, the recipient entrusts the bank to handle the collection. (1) The payee shall send the collection voucher to the bank together with the shipping certificate or other relevant certificates and transaction documents that meet the requirements of the collection and acceptance settlement.

If the payee needs to retrieve the shipping documents, the bank should stamp the collection voucher with the stamp of "verified shipping documents". For the collection of military products, if there is a representative of the military stationed in the factory to inspect the products or a designated person to be responsible for financial supervision, the payee shall also fill in the settlement notice stamped with the seal of the military representative or designated personnel in the factory (to reserve an impression in the bank), put the transaction documents and shipping documents into a sealed bag, and fill in the collection number on the sealed bag; At the same time, fill in the settlement notice and the number of the sealed bag on the collection receipt. Then, send the collection voucher and settlement notice to the bank for collection.

If there is no representative of the military stationed in the factory to handle the collection with the code number, the settlement notice shall not be filled, but the confidential code shall be filled in on the transaction documents and handled in accordance with the normal collection method. (2) After receiving the collection voucher and its attachments, the payee's bank shall carefully examine it in accordance with the scope and conditions of the collection and the requirements recorded in the collection voucher, and if necessary, it shall also check and accept the purchase and sale contract signed by the payer. Those who do not meet the requirements or violate the purchase and sale contract to deliver goods cannot be handled.

The review time shall not exceed the next day.

Documents Against Acceptance (d a) are not included in the collection method

There are usually two ways to release documents against payment: documents at sight and documents at sight, which generally need to be paid by the bank (fax) or must be received.

Personnel engaged in international affairs need to have a certain understanding of foreign trade settlement methods, so as to reduce unnecessary troubles in the process of practice. Let's take a look at the common foreign trade settlement method of bank collection. Bank collections can be divided into two types: bare collections and documentary collections.

Blank collection refers to the collection of financial documents without commercial documents, that is, only the financial documents are entrusted to the bank to collect on behalf of the bank.

Documentary collection refers to the collection of financial documents with or without commercial documents. At present, documentary collection is more commonly used, in which documentary collection is divided into two categories: documents against payment (DP) and documents against acceptance (D A).

Documentary collection is a collection method of collecting money from the importing bank together with the bill of exchange together with the commercial documents, sometimes in order to avoid stamp duty, there are also bills of exchange that are not issued, and only the commercial documents are entrusted to the bank to collect on behalf of the bank. There are two types of documentary collections: Doc Against Sight and Doc Against Usance. Bill at sight means that the bill of exchange issued is a demand bill, and the importer can only get the commercial documents as long as the payment is completed.

The usance bill refers to the document preparation method in which the exporter issues a usance bill and the importer accepts the bill of payment to the bank on the maturity date of the bill.

Doc Against Acceptance refers to a way in which the collecting bank delivers the documents to the importer after the acceptance of the usance bill. Bare collection refers to a collection method in which the bill of exchange is not accompanied by a freight bill. It is mainly used for the mantissa of the payment, sample cost, commission, cushion cost, subordinate fee, compensation and non-payment of **.

<> "What is Collection.

Collection refers to the settlement method in which the exporter or creditor issues a bill of exchange to entrust the bank of the exporting place to collect money from the importer in order to collect the payment from the foreign importer or debtor.

Collection classification. Collections can be divided into bare ticket search collection and documentary collection according to whether or not freight documents are attached.

1.Naked collection is a collection method in which a bill of exchange is not accompanied by a freight bill.

2.Documentary collection is a collection method in which bills of exchange together with commercial documents collect money from the importing bank.

Parties to the collection.

The parties to the collection include the consignor, the sender, the collecting bank, and the payer.

1.The consignor, also known as the drawer, is generally the exporter.

2.A consignment bank, also known as a collection bank, is a bank that entrusts the collection of money.

3.The collection bank is the ** person in the place of import. Destroyed.

4.The payer, generally the importer, is the party to the payment.

The meaning of collection refers to the settlement method in which the exporter issues a bill of exchange and entrusts a local bank to collect the payment from the importer in order to collect the sales price or labor price from the foreign importer. Collection is a commercial credit, and when the bank handles the collection business, it has no obligation to check whether the shipping documents are correct or complete, nor does it assume the responsibility that the payer must pay.

Collections are more risky to exporters, and D A is more risky than D P. The documentary collection method is that the exporter ships the goods first and collects the payment later, so it is more risky for the exporter. If the importer goes bankrupt and loses the ability to pay, or the goods are imported after the goods are shipped, the importer refuses to pay, or the importer does not obtain the import license in advance, or does not apply for foreign exchange, is prohibited from importing or unable to pay foreign exchange, etc., the exporter not only fails to recover the payment on time, but also may cause the loss of both the payment.

If the goods have arrived at the place of import, the importer does not pay for any reason, the exporter also has to bear the goods at the destination of the pick-up, storage, insurance costs and possible deterioration, short quantity, short weight risk, if the goods are resold elsewhere, there will be a loss of quantity and **, if the goods can not be resold, the exporter will have to bear the cost of transporting the goods back to their home country and bear the loss that may be sold cheaply by the local ** because of the storage time is too long.

Although the exporter has the right to claim compensation from the importer for the above-mentioned losses, in practice, even if the exporter can recover some compensation, it is difficult to make up for all the losses even if the importer has gone bankrupt or fled. Nevertheless, in today's increasingly competitive international market, exporters sometimes have to resort to collection in order to sell their goods and dominate the market. If the other importer has a good reputation, and the exporter has its own office outside the defeated town, the risk can be relatively small.

Factors that should be paid attention to when using the collection method: in China's exports, when the collection method is adopted, it is first necessary to strengthen investigation and research, examine the credit and business style of the importer, generally use the payment document method, and be cautious about the acceptance document delivery method; secondly, it is necessary to understand the commercial habits of the importing country, use the collection method prudently, and strive for safe and rapid collection of foreign exchange; Finally, Chinese enterprises should strive for self-insurance, such as using CIF and CIP conditions to close the contract.

Collection refers to a settlement method in which the exporter issues a bill of exchange with the importer as the payer, and entrusts the exporter's bank to collect the payment from the importer through its branch or bank on the importer. Including DP (Documents Against Payment) and D A (Documents Against Acceptance).