How does documentary payment work?
Documentary payments offer greater certainty for your international transactions. You know in advance exactly where, when, in which currency and how payment will be made. We explain the available solutions and how they work.
Types of documentary payment
Documentary Collection
A Documentary Collection means that the bank acts as an intermediary. As a supplier, you provide us with the necessary commercial documents. These documents, including the collection instructions, are ultimately intended for your customer. These instructions specify how, when and in which currency you will pay. We then send all documents to the customer's bank with the instruction to only release them to the customer once the collection instructions have been followed and all conditions have been met. Only then will the customer receive the goods.
There are various types of Documentary Collection. What type is the best solution for your situation depends on the wishes and possibilities of the trading partners and varies per transaction.
A Documentary Collection is a means of payment. It is not a guarantee that the customer will pay. The debtor risk remains at your expense. A Letter of Credit does exclude this risk.
There are various types of Documentary Collection. What type is the best solution for your situation depends on the wishes and possibilities of the trading partners and varies per transaction.
A Documentary Collection is a means of payment. It is not a guarantee that the customer will pay. The debtor risk remains at your expense. A Letter of Credit does exclude this risk.
Letter of Credit (L/C)
As a supplier, you make agreements with your customer. The customer then instructs the bank to open a Letter of Credit in your favour. This bank then forwards the L/C to your bank. Your bank checks the documentation and sends you the text of the Letter of Credit. Once you have received the text in good order and everything is correct, you can produce the ordered goods and/or prepare them for shipment.
Once the goods are on their way, you draw up the agreed documents and send them to ABN AMRO. We check the documents. We arrange the payment and send the documents to the customer's bank. Is everything in order? Then the customer receives the documents. Finally, the final payment is made.
The Letter of Credit is a means of payment. It eliminates the risk of the customer not paying.
Once the goods are on their way, you draw up the agreed documents and send them to ABN AMRO. We check the documents. We arrange the payment and send the documents to the customer's bank. Is everything in order? Then the customer receives the documents. Finally, the final payment is made.
The Letter of Credit is a means of payment. It eliminates the risk of the customer not paying.
Bank Guarantee
Your business partner may ask for a Bank Guarantee. He or she wants to be sure that you will actually pay for the goods. You ask us to draw up and issue a Bank Guarantee. We will then block the amount in your bank account for the duration of the Guarantee. If you fail to pay, your business partner can invoke the Bank Guarantee. We will handle this claim (written request) financially on your behalf. And we will settle the outstanding amount with you.
There are various types of Guarantees. Which Guarantee is the best solution for you depends on the type of transaction and the security you want to offer.
A Bank Guarantee is not a payment method, but it gives your business partner the certainty of payment if you unexpectedly fail to meet your obligations.
There are various types of Guarantees. Which Guarantee is the best solution for you depends on the type of transaction and the security you want to offer.
A Bank Guarantee is not a payment method, but it gives your business partner the certainty of payment if you unexpectedly fail to meet your obligations.
Documentary Collection
A Documentary Collection means that the bank acts as an intermediary. As a supplier, you provide us with the necessary commercial documents. These documents, including the collection instructions, are ultimately intended for your customer. These instructions specify how, when and in which currency you will pay. We then send all documents to the customer's bank with the instruction to only release them to the customer once the collection instructions have been followed and all conditions have been met. Only then will the customer receive the goods.
There are various types of Documentary Collection. What type is the best solution for your situation depends on the wishes and possibilities of the trading partners and varies per transaction.
A Documentary Collection is a means of payment. It is not a guarantee that the customer will pay. The debtor risk remains at your expense. A Letter of Credit does exclude this risk.
There are various types of Documentary Collection. What type is the best solution for your situation depends on the wishes and possibilities of the trading partners and varies per transaction.
A Documentary Collection is a means of payment. It is not a guarantee that the customer will pay. The debtor risk remains at your expense. A Letter of Credit does exclude this risk.
Letter of Credit (L/C)
As a supplier, you make agreements with your customer. The customer then instructs the bank to open a Letter of Credit in your favour. This bank then forwards the L/C to your bank. Your bank checks the documentation and sends you the text of the Letter of Credit. Once you have received the text in good order and everything is correct, you can produce the ordered goods and/or prepare them for shipment.
Once the goods are on their way, you draw up the agreed documents and send them to ABN AMRO. We check the documents. We arrange the payment and send the documents to the customer's bank. Is everything in order? Then the customer receives the documents. Finally, the final payment is made.
The Letter of Credit is a means of payment. It eliminates the risk of the customer not paying.
Once the goods are on their way, you draw up the agreed documents and send them to ABN AMRO. We check the documents. We arrange the payment and send the documents to the customer's bank. Is everything in order? Then the customer receives the documents. Finally, the final payment is made.
The Letter of Credit is a means of payment. It eliminates the risk of the customer not paying.
Bank Guarantee
Your business partner may ask for a Bank Guarantee. He or she wants to be sure that you will actually pay for the goods. You ask us to draw up and issue a Bank Guarantee. We will then block the amount in your bank account for the duration of the Guarantee. If you fail to pay, your business partner can invoke the Bank Guarantee. We will handle this claim (written request) financially on your behalf. And we will settle the outstanding amount with you.
There are various types of Guarantees. Which Guarantee is the best solution for you depends on the type of transaction and the security you want to offer.
A Bank Guarantee is not a payment method, but it gives your business partner the certainty of payment if you unexpectedly fail to meet your obligations.
There are various types of Guarantees. Which Guarantee is the best solution for you depends on the type of transaction and the security you want to offer.
A Bank Guarantee is not a payment method, but it gives your business partner the certainty of payment if you unexpectedly fail to meet your obligations.
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