Open documentary collection

Open documentary collection is a less secure version of documentary collection, also known as documentary collection. When using this, the customer gets the goods before paying for them.

Documentary collection (D/P) is one of the frequently used payment solutions in contracts for international trade transactions. There are two types of this solution in connection with the customer's credit: the safer linked and the riskier open documentary collection direct debit. The latter is also referred to as unlinked, plain direct debit.

In the case of open documentary collection, as the seller, we deliver the goods and the documents necessary for their exchange directly to the buyer's address and at his disposal. (Additional documents required in the contract will be sent to our bank together with the direct debit order.)  In this way, the buyer receives the goods even before payment, and then pays the counter value at the request of the bank. 

It goes without saying that the risk of being out of possession is very high here.  An open debt collection does not provide a guarantee that the buyer will pay or fulfill his obligations on time. In addition to the risk of being evicted, the seller must also account for interest losses due to late payment.

Regarding the time of payment, there are two versions of the documentary collection: the demand (cash payment) and the deferred payment documentary collection. Open documentary debt collection should only be used for demand collection orders.

In the case of an open direct debit order, as a buyer, we must immediately pay the bank 's payment request or give a transfer order at the same time as receiving the goods. If we refuse to pay due to defective goods or incomplete documents, the banks will immediately notify the seller. 

Documentary collection for a certain period of time (deferred payment) is always a linked debt collection. As a seller, it enables us to sell our products risk-free on credit. In such cases, the bank does not provide the documents necessary to redeem the goods against payment, but against the promise of payment by our customer. 

The international designation of the payment method, D/A (documents against acceptance), indicates that a promise to pay in the form of a bill of exchange* is the typical solution here. The bill of exchange can be the customer's own bill of exchange or the one drawee to our customer by us – acceptance by the buyer of a foreign bill of exchange, usually on its own decree. Instead of a bill of exchange, a bank guarantee or a bank guaranty can also be a standard collateral.