Documentary Collection — D/P and D/A Guide
Documentary collection sits between open account and a letter of credit — the bank handles document exchange but does not guarantee payment. Cheaper than an LC, but the risk stays with the exporter.
Governing rules
URC 522 (ICC)
Banks involved
Remitting + Collecting
D/P payment timing
On presentation
D/A payment timing
At maturity (30–180 days)
Collection Type Selector
Select a documentary collection type to see how the bank process works, who carries the risk, and when each type is appropriate
Exporter risk
Moderate — goods at destination before payment
Payment timing
Immediate on presentation
Goods control
Exporter holds BL until payment
Bank cost vs LC
~70–80% lower than LC
How documentary collection works — step by step
A documentary collection involves four parties: exporter, remitting bank, collecting bank, and importer. Each step must be completed in sequence — a missing instruction or wrong document set can cause the entire collection to fail.
Step 1
Step 1
Step 2
Step 2
Step 3
Step 3
Step 4
Step 4
Step 5
Step 5
Step 6
Step 6
Documentary collection rules at a glance
Governed by ICC Uniform Rules for Collections (URC 522), in force since 1996. These rules apply when incorporated by reference in the collection order — they are not mandatory but are universally adopted by banks.
Governing rules
URC 522
ICC, in force since 1996
D/P payment timing
At sight
On first presentation
D/A typical tenor
30–180 days
From sight or BL date
Bank fee vs LC
70–80% less
No payment guarantee
Exporter risk — the fundamental difference from an LC
Bank transmits, does not guarantee
URC 522 — key rules exporters must know
ICC Uniform Rules for Collections
Documentary collection vs letter of credit — when to use each
Use DC for trusted buyers, LC for unknown buyers
Frequently Asked Questions
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