Export Collection : Business Sector (‘BO’)
The Export Collections business sector is used to send documents received from a customer to a correspondent bank located abroad for collection. The process begins with a buyer making an order or a purchase of goods. The exporter[Drawer] or seller then makes arrangements to send the goods to
the buyer or importer. The seller submits a collection order to his or her bank[Remitting Bank]. The seller’s bank then submits the collection order to the bank of the buyer[Collecting/Presenting Bank].
The buyer’s bank presents a 'presentation document' to the buyer[Drawee], who then must make a payment or acceptance to his or her bank. The payment or acceptance is sent to the seller’s bank by the buyer’s bank, and the seller’s bank submits this payment or acceptance to the seller.
Documents Against Payment Collection:
A document against payment collection is initiated with the exporter shipping goods to a buyer. The seller or exporter supplies their bank with the shipping (and other relevant) documentation, which then forwards the documents to the importer or buyer’s bank. The bank can only avail the documents
to the buyer once the payment has been made and finalized. After payment completion, the buyer’s bank (also known as the collecting bank) transfers the funds to the bank of the exporter, who then transmits the funds to the exporter/seller.
Documents Against Acceptance Collection:
The exporter or seller provides a credit arrangement to the buyer. The extension of credit is done through a time draft, which means that the documents related to the sale of goods are availed to the buyer or importer once he or she has accepted and signed the time draft. Time draft – > A bill of exchange that allows for a buyer to make payment at a later stage and legally binds the buyer to make the payment on a specified date. Documents may be released only if the importer accepts the accompanying draft, thereby incurring an obligation to pay at a specified future date. When the specified date is reached, the collecting bank reaches out to the buyer for payment. Once the payment has been made, the buyer’s bank also known as the collecting bank transfers the funds to the bank of the exporter, who then transmits the funds to the exporter/seller.
How to do pre open or Pre Advise an Export collection -
A pre-advice is a brief ( preliminary information) advice of documentary Collection sent by the Exporter Bank to the Importer Bank Transaction BOTPOP is used to pre-advise (or pre-open) an export Collection.
Sending Documents in Export Collection -
The exporter submits the documents and collection instructions to it’s bank with instructions for delivery. The exporter’s bank sends the documents to the importer’s bank together with the exporter’s instructions. In DOKA Transaction BOTDAV is used to create a Export collection
Amending Export Collection -
For Any changes that is to be made to already issued Export collection to be done via Amendment transaction In Doka Any changes to be done to Export collection can be done through BOTAME Transaction.
Sending Documents in 2nd Mail in Export collection -
If a Exporter already sent set of documents through Send documents (BOTDAV) Transaction and if he wishes to send second set of documents he can utilize the Sending Documents in 2nd Mail (BOTRAD) Transaction. This transaction is used for advising the document sets in 2nd mail. The user may select any contract party or another party that is entered in this transaction only to be the receiver of the documents. No bookings takes place at all in this transaction.
Accepting and Settling Documents in Export Collection -
Transaction BOTPAY is used either to send documents 1) Under an export collection (without settlement),
that have been received and checked 2) Or to send and to settle/accept the documents at the same time.
When dealing with sight documents,- The default procedure is set up so that the collection is settled instantly. If the document set is paid in full, this is then closed and the closing date of the contract set at today's date.
When dealing with usance documents,- The documents are accepted, the appropriate maturity posted and a temporary settlement generated. The final settlement of usance maturities at the due date takes place in transaction “Settle Usance Documents at Maturity” (BOTSET).
Usance settlement in Export Collection -
In case of Usance Collection, the documents are accepted in BOTPAY transaction but a final settlement at maturity takes place in the transaction 'Settle Usance Documents at Maturity'.(BOTSET)
This transaction is run on the due date of usance documents to settle amounts relating to an export collection. This transaction pays the exporter funds that the collecting bank has remitted.
Close a Export Collection
Transaction (BOTCAN) is used to cancel an export collection for any reason. The closing date is set to today's date.(System date)
Re-open a Export Collection
For Any reason if parties wishes to reopen transaction BOTROP is used to re-open a previously closed export collection.
Flow Chart -
Transaction Codes related to Export Collection -
|BOTATT||Attaching an Incoming Message|
|BOTCHG||Changing Contract Data|
|BOTDCR||Processing Discrepant Documents|
|BOTPAY||Accept and Settle Documents|
|BOTPOP||Pre-Opening an Export Collection|
|BOTRAD||Sending Documents in 2nd Mail|
|BOTSCC||Sending a Clean Collection|
|BOTSEL||Display an Export Collection|
|BOTSET||Settle Usance Documents at Maturity|
|BOTTRA||Sending Tracer / Advice of Fate|
|BOTTRF||Transferring the Collecting Bank|
Outgoing Messages in Export Collection -
|Transaction||Name of Message||Receiver||Letter / Swift|
|Pre-Opening an Export Collection||Pre-Advice||Collecting Bank/ Drawee||Letter|
|Pre-Advice, 2nd Mail||Selected party or same party as 1st mail||Letter|
|Acknowledgment||Remitting Bank/ Drawer||Letter / 410|
|Rejection Message||Remitting Bank/ Drawer||Letter|
|Sending Documents||Documentary Collection Order 1st||Collecting Bank/ Drawee||Letter|
|Documentary Collection Order 2nd||Selected Party or same addressee as 1st mail||Letter|
|Acknowledgment of Collection||Remitting Bank/ Drawer||Letter / 410|
|Sending a Clean Collection||Advice of Clean Collection||Collecting Bank/ Drawee||Letter|
|Acknowledgment||Remitting Bank/ Drawer||Letter / 410|
|Sending Documents in 2nd Mail||Documentary Collection Order 1st||Selected Party||Letter|
|Documentary Collection Order 2nd||Selected Party||Letter|
|Acknowledgment of Collection||Remitting Bank/Drawer||Letter / 410|
|Processing Discrepant Documents||Acknowledgment of Rejection||Collecting Bank/ Drawee||Letter|
|Rejection||Remitting Bank/ Drawer||Letter|
|Rejection 2nd Mail||Remitting Bank/ Drawer||Letter|
|Amending||Acknowledgment of Amendment||Remitting Bank/ Drawer||Letter / 410|
|Amendment||Collecting Bank/ Drawee||Letter / 430|
|Settle Usance Documents at Maturity||Advice to Debit Party||Collecting Bank/ Drawee||Letter|
|Advice of Payment (Credit Party)||Remitting Bank/ Drawer||Letter|
|Sending Tracer / Advice of Fate||Tracer||Selected Party||Letter / 420|
|Advice of Fate||Selected Party||Letter / 422|
|Transferring the Collecting Bank||Transfer Message Old Collecting Bank||Old Collecting Bank||Letter|
|Transfer Message New Collecting Bank||Selected New Collecting Bank||Letter|
|Accept and Settle Documents||Advice to Debit Party||Collecting Bank/ Drawee||Letter|
|Advice to Debit Party 2nd mail||Drawee||Letter|
|Advice to Credit Party||Remitting Bank/ Drawer||Letter|
|Advice of Payment||Remitting Bank/ Drawer||Letter|
|Advice to Credit Party||Letter|
|Closing||Advice of Cancelation||Collecting Bank/ Drawee||Letter|
|Acknowledgment of Cancellation||Remitting Bank/ Drawer||Letter / 410|
|Advice of Cancellation||Drawer||Letter|