Does your business purchase goods from abroad? If so, as an importer, you may already have experienced that importing goods can involve a lot of paperwork. Wondering exactly how it all works or maybe not enough time to deal with all that admin? In that case, KBC Import Documentary Collection could be what you and your business need.
When is KBC Import Documentary Collection a good idea?
If you’re an importer wanting to work with foreign suppliers on a collection basis, but you’re not exactly sure how, or when you don’t have the time yourself to deal with the administrative headaches.
What is KBC Import Documentary Collection?
Your supplier wants to be sure that the sale will go through before
producing or dispatching the goods. KBC will guarantee this when
you take out an import documentary credit.
In other words, KBC acts as a third partner and receives your foreign customer’s trade documents from its bank, possibly accompanied by financial documents. KBC delivers those documents to you (the importer) according to the collection instructions. You only receive the documents once you’ve paid (documents against payment) or a bill of exchange has been accepted (documents against acceptance).
- Cheaper payment technique with simpler administration than the irrevocable import documentary credit.
- As buyer, you pay or accept a bill of exchange on acceptance of the documents. You postpone the advance payment term to your advantage or convert it into a deferred payment.
- As buyer, you can refuse the documents. In principle, you are also refusing delivery of a commercial contract.
- You can access a list of open documentary collections with a single click on the KBC Flexims online portal.
How KBC Import Documentary Collection works
- Step 1: you, the importer, agree with a foreign supplier that you want to work on a collection basis.
- Step 2: your supplier dispatches the products.
- Step 3: your supplier provides the relevant dispatch documents to its bank (the remitting bank).
- Step 4: this bank takes over the collection instructions from the supplier and adds its own instructions. These are then sent to KBC.
- Step 5: KBC checks the documents received, determines to what extent you, as client, are able to comply with their conditions and notifies the remitting bank. At the same time, KBC notifies you that it has received the documents and what further steps will be taken.
- Step 6: if you have complied with the conditions (payments, etc.), you will receive the documents from KBC. You are, of course, also free to refuse them. In that case, KBC will notify your supplier’s bank.
- Step 7: KBC notifies the remitting bank that the bill of exchange has been accepted.
- Step 8: the remitting bank notifies the exporter.
N.B.: remember that you, as buyer, only receive the documents after payment or acceptance of the enclosed bill of exchange.