What is collection?
What is collection?
Collection is one of the means of settlement, which belongs to commercial credit. There are two types of collection: a documentary collection, clean collection. The creditor (exporter) issued a financial document (Documentary) or not accompanied by financial documents (cleancollection) commercial documents, documents of cooperative banks, cooperative banks through the collecting bank to the debtor (importer) on behalf of receivables.
Clean collection: collection when a bill is not attached to any documents, but only with "non shipping documents (invoice, advance list etc.). This kind of settlement is mainly used for the subordinate cost of the trade, the sum of the payment, the Commission, the settlement of the sample fee and non trade settlement, etc..
Documentary collection: commercial documents accompanied by documents. According to the documents, we can divide them into D / A and D / P. Documents, i.e., the issuing bank releases all original documents to the importer, including the marine bill of lading, which means that the ownership of the goods is transferred to the importer.