Cash against documents

Documents are delivered to the customer only against payment or acceptance of a bill of exchange. In this last case, the bill of exchange may be guaranteed by a bank, which provides the supplier with a significantly higher payment security.
Obtaining documents allow the buyer to take possession of the goods and to clear the shipment at customs.
Cash against document method advantages
- Ease of implementation by the buyer: its formalism is considerably reduced compared to the documentary credit.
- No use of bank credit line.
- Ease of use by the seller.
- Banks do not control the documents as for a documentary credit.
- Cost is low.
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My DSO Manager, the innovative debt collection software
My DSO Manager offers powerful and flexible features for credit management and debt collection management.
It is very easy to implement and user friendly.
Dunning ations are triggered depending on the collection scenario assigned to each customer and the situation of the account (overdue invoices ...).
Recovery documents (e-mails, interactive e-mails, postmail letters, SMS, ...) are easy to create and to customize with the use of #Hashtags. See more with the demo.
Disadvantages of cash against documents
The disadvantages are related to the fact that banks are not engaged as for a documentary credit. So there is no bank guarantee of payment or insurance on the proper management of the process by the presenting bank.- Issuance of documents to the buyer without payment or without acceptance of a draft.
- Refusal of the buyer to take possession of documents and goods. In this case the seller is not paid and finds himself with the material located in the country of the buyer!
- No payment to the seller.
How to improve the cash against document?
Several best practices can improve this imperfect instrument.- Give specific instructions to the presenting bank.
- Send the original documents to the bank and never directly to the buyer.
- Refer to the ICC Rules 522
- Set the period for payment from a generator which is controlled (eg issuance of B / L).
- Ship by sea and label the B / L to order the bank.
Process

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Last comments
S. - 09/10/2020
For DP/DA payment terms, can the seller submit the document directly to the customer's bank while requesting to send the payment to their bank's account
P.M. - 30/05/2020
Point to point information and clearly explaining .
Easy to understand for every one Even for a initial too.
Good presentation .
S.K. - 26/04/2019
very helpfull. most use for entrepreneur.
F.A. - 13/01/2019
Very helpful article, really appreciate that!
K.S. - 13/12/2018
Very good Explanation. Even for a guy with minimum idea of these terms, this was very helpful.
M.D. - 28/08/2018
VERY ADEQUATE AND RELIABLE INFORMATION.
YOU CAN EASILY DIGEST VALUABLE KNOWLEDGE FROM THIS SITE.
THANKS GUYS
Y.A. - 18/04/2017
Excellent piece of explanation. Helped me clear the doubts.
G.S.
Very good information
N.B.A.
Very very usefull site you can really benefit a good knowledge
M.G.A.
This site it too useful
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