• Documentary Collections

    Product
     
    Benefits
    Key Features
    Export Documentary Collections
     
    • It’s a simple operation
    • It improves cash flow
    • Customers using an Export Collection where the bill has been guaranteed may request us to discount the bill before due date
    • It is convenient – has no impact on the client’s credit facilities
    • Reduces the risk of losing the title to the goods before receiving payment for goods shipped on a bill of lading (a detailed list/receipt of goods being exported
    • Export Documentary Collection operates as follows:
      • The exporter sends documents that allow access to the goods being imported (i.e. a bill of lading, certificate of origin, invoice) to their bank, along with a bill of exchange requesting payment according to the agreed terms
      • Payment is normally requested in one of two ways:
      • Immediately on presentation of the collection to the importing customer ('sight payment'), or
      • On an agreed future date ('term payment')
      • In the case of term payments, importing customers will be required to endorse the bill of exchange (ie. sign it, usually on the back) to indicate their acceptance of it before we release to them the documents allowing access to the goods.
    • Our Export Documentary Collections are governed by International Chamber of Commerce rules; this means that aspects such as responsibilities and liabilities are clearly defined and standardised worldwide
    • If the correspondent bank (collecting bank) has guaranteed payment of the bill of exchange we can discount the bill of exchange without affecting our client’s facilities. This allows them to improve their cash flow by receiving funds earlier than the due date. In this case, our risk is marked against the collecting bank.
    Import Documentary Collections
     
    • It’s a simple and efficient tool for settling trade debts
    • It improves cash flow for customers who are able to negotiate credit terms
    • Payments of any value may be made in any freely traded currency
    • Payment can be made immediately on presentation of the documents or on an agreed future date.
    • The exporter sends documents that allow access to the goods being imported (i.e. a bill of lading, certificate of origin, invoice, etc.) to their bank, along with a bill of exchange requesting payment according to the agreed terms
    • Payment is normally requested in one of two ways: immediately on presentation of the collection to the importing customer ('sight payment') or on an agreed future date ('term payment')
    • In the case of term payments, importing customers will be required to endorse the bill of exchange (ie. sign it, usually on the back) to indicate their acceptance of it before we release to them the documents allowing access to the goods.
     
     

     

     

  • Letter of Credit

    Product
     
    Benefits
    Key Features
    Export Documentary Letter of Credit
     
    • The Export Documentary Letter of Credit offers you with a comprehensive range of international trade services to support your overseas trading
    • 'gateways' to a whole range of other international products and services such as foreign exchange products and risk mitigation
    • you can secure a specific payment date
    • Payment is only made to exporters when they present documents that comply exactly with the terms and conditions of the Documentary Letter of Credit
    • The exporter may be able to discount deferred Letter of Credit, thus receiving their payment immediately upon presentation of complying documents
    • No impact on the exporter’s credit facility. Even if we discount the Letter of Credit, the risk will be on the issuing bank
    • Letters of Credit can be issued for any value and in any freely traded currency (subject to appropriate facilities having been marked for the customer)
    • Sight or term payment options
    • Payment can be received immediately on presentation of compliant documents ('sight' payment) or on a fixed or determinable future date ('term' payment)
    Import Documentary Letter of Credit
     
    • Our Import Documentary Letters of Credit provide you with valuable risk mitigation tools to assist with your international trade transactions.
    • By using an Import Documentary Letter of Credit, you can mitigate the risks of your supplier shipping incorrect or defective goods
    • Import Documentary Letter of Credit are governed by International Chamber of Commerce rules which means responsibilities, liabilities are clearly defined and standardised worldwide
    • We offer a comprehensive range of international trade services which allow you to strengthen relationships with your overseas suppliers
    • Trade services products, such as letters of credit and collections, often act as 'gateways' to a whole range of other international products and services such as foreign exchange products and risk mitigation. Income benefits can be extensive.
    • As an importer you’re assured that if the terms of Letter of Credit are complied with, you’ll receive the correct goods on time
    • Customers can specify the documents against which payment will be made
    • Suppliers receive payment only if they present documents which comply exactly with the terms set out in the letter of credit
    • While a letter of credit cannot guarantee the quality of the goods, it can call for an independent third party to inspect the goods prior to shipment and provide documentation detailing the inspection findings. This is an important advantage when buying from new suppliers
    • We can offer guidance on the documents to ask for, and how to word the terms of a Letter of Credit
    • Our letters of credit are always irrevocable – they cannot be amended or cancelled without the agreement of all the parties
    • The bargaining position of customers is enhanced - customers may be able to negotiate longer credit periods when they provide letters of credit
    • They may also be able to reduce their costs by using the benefits to the supplier as a lever in negotiations
    • We can establish the Letter of Credit at sight (enabling beneficiary to get paid upon presentation of complying documents), and refinance the importer for a further period (i.e. allowing him to pay for his imports at a future date and also to sell the goods before he has to pay). This improves our client’s cash flow situation, and also allows him to negotiate better pricing with the exporter
     
     

     

     

Need more help?

Let one of our consultants assist you.

Call our Transactional Banking Customer Service Center on:

0860 227 232

E-mail us at:

absaeb@absa.co.za