documentary collection
[/ˌdɒkjuˈmentəri kəˈlekʃən/]
nounpl: documentary collections
cobrança documentária
1. A trade finance method where a bank acts as an intermediary to collect payment for goods from the buyer on behalf of the seller, with payment contingent upon the presentation of shipping documents.
The exporter used a documentary collection to ensure payment before releasing the goods to the importer.
O exportador utilizou uma cobrança documentária para garantir o pagamento antes de liberar os bens para o importador.
2. A banking procedure where documents of title are transferred to the buyer only after payment or acceptance of a draft.
Documentary collection is less expensive than a letter of credit but carries more risk for the seller.
A cobrança documentária é menos custosa que uma carta de crédito, mas carrega mais risco para o vendedor.
Documentary collection is a widely used international trade practice in both Brazil and the United States, particularly common among small to medium-sized export/import businesses. In Brazil, it is a preferred method for managing international transactions due to cost considerations compared to letters of credit. It represents a middle ground between the riskier open account terms and the more expensive letter of credit, reflecting business practices in emerging markets.
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