Documentary collection –
a settlement instrument that:
- ensures that the bank releases shipping documents to the buyer only upon fulfilment of specified conditions – receipt of payment or buyer’s commitment to pay at a later date;
- involves lower charges than a letter of credit, making it a cost-effective solution for international transactions with reliable partners;
- reduces financial risk in executing transactions;
- allows the seller to retain control over goods until payment is received or a bill of exchange is accepted (particularly in sea transport);
- offers flexibility to choose the preferred type of documentary collection according to business needs;
- features simpler documentation and administration compared to letters of credit;
Types of documentary collection
Documents are released to the buyer only after the corresponding payment has been received (also referred to as documents against payment – D/P, cash against documents – CAD).
Documents are released to the buyer only after acceptance of a bill of exchange drawn by the seller, whereby the buyer undertakes to pay the specified amount on an agreed future date (also referred to as documents against acceptance – D/A).
Why choose documentary collection
with Artea Bank?
Security assurance
We act as an intermediary controlling the flow of documents and funds, reducing risk for both buyer and seller.
International reach
Benefit from our correspondent banking network – information is transmitted securely and promptly via the SWIFT system.
Global standards
Documentary collections are governed by the International Chamber of Commerce rules (URC 522).
Digital accessibility
You can conveniently track information on sent and received documentary collections by logging into your online banking account.
Opportunities and Benefits
This is a clear and secure method of international settlement, providing the seller with greater control over goods
and the buyer with a flexible and reliable payment process.
- For the seller
- For the buyer
- Greater control over goods: this method offers more security than open account method – by collecting documents of title (e.g., bill of lading), the buyer cannot take possession of goods until payment is made or a bill of exchange is accepted.
- Bank acts as a trusted intermediary: ensures that documents are released to the buyer only upon fulfilment of the seller’s conditions and supervises the payment process.
- Simple, reliable, and cost-effective: compared to letters of credit, documentary collection is easier to administer and less expensive.
Documentary collection
process
The buyer and seller agree to use documentary collection for settlement of goods.
The seller ships the goods and submits to their bank the commercial invoice, transport documents, and other required documents along with a request for collection.
The seller’s bank forwards the documents to the buyer’s bank with instructions for delivery. The buyer’s bank informs the buyer of the received documents and states the conditions for their release.
- Under documents against payment (D/P):
the buyer makes payment to their bank, which then remits the amount to the seller’s bank. - Under documents against acceptance (D/A):
the buyer accepts the bill of exchange and undertakes to pay the amount specified therein when the agreed maturity date arrives.
Upon payment or acceptance of the bill of exchange, the buyer’s bank releases to the buyer the documents required to take possession of the goods. After receiving funds from the buyer’s bank, the seller’s bank credits the amount to the seller’s account.
Are you a seller and want
to submit documents for collection?
Fill out the application for documentary collection and send it together with the required supporting documents to one of the following bank branches:
- AB Artea Bank, Trade Finance and Factoring Unit, Tilžės str. 149, LT-76348 Šiauliai;
- AB Artea Bank, Trade Finance and Factoring Unit, Karaliaus Mindaugo ave. 35, LT-44307 Kaunas;
- AB Artea Bank, Trade Finance and Factoring Unit, Konstitucijos ave. 14A, LT-09308 Vilnius.
Are you a buyer and want
to settle via documentary collection?
Provide the seller with our bank’s name and address: AB Artea Bank, Tilžės str. 149, LT-76348 Šiauliai, Lithuania, and, if required, our SWIFT code: CBSBLT26.
The seller’s bank will send the documents and collection instructions to our bank, and we will notify you upon receipt.
We understand your objectives and value your individual circumstances. Adapting to your needs is our mission. Yours is to build your future with confidence.
Frequently Asked Questions
A Letter of credit is a bank’s undertaking to pay the seller provided all credit terms are fulfilled. In documentary collection, the bank is not obligated to pay – it acts solely as an intermediary for document transmission and payment administration.
Collection is suitable when there is mutual trust between trading partners or when the transaction carries lower risk – for example, when the value is modest or the goods can easily be resold elsewhere.
Under Documents Against Payment (D/P) or Cash Against Documents (CAD), the buyer can obtain the documents (and thus title to the goods) only after paying the full amount immediately.
Under Documents Against Acceptance (D/A), the buyer may receive the documents upon accepting a bill of exchange, thereby committing to pay later at a specified future date.
Detailed information on sent and received documentary collections is available in online banking under Loans and Leasing → Documentary Collection.
Yes, documentary collection can be combined with other settlement methods, such as partial advance payment or other conditions.
In documentary collection transactions, we act only as an intermediary and do not guarantee payment. The buyer may refuse to pay or accept the bill of exchange, or may fail to pay it after acceptance.
Additionally, the buyer often cannot verify whether the goods match the documents until payment or acceptance has been completed.
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The bank’s undertaking to honour payment for presented shipping documents upon issuance of a letter of credit ensures secure settlement of transactions and strengthens trust between trading partners.
Factoring
Access working capital quickly and easily without pledging assets.
Guarantees
Whether you are participating in a tender, securing the fulfilment of a transaction or tax obligations, or entering a new market, our bank guarantee will strengthen the credibility of your business.