Mixed Payment Terms - Co-Acceptance

Simple is Beautiful; the only thing came in my mind when thought of documentary collection. And I think more and more people are thinking the same in these days. Documentary Collection offers us far greater security than selling on open account; but not as much as a documentary credit. We should therefore be more cautious before starting selling using this method of payment. Documentary Collection Forum is an effort to help you on this way – admin; besttradesolution.com
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harypg
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Joined: Sun Aug 13, 2017 10:14 pm
First Name: Hari
Last Name: Prasad
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Location: India

Mixed Payment Terms - Co-Acceptance

Post by harypg »

Hi Guys,

We have a query with respect to co-acceptance of an mixed tenor collection bill. Below is the scenario:

Bill Amount : USD 100000
Payment Terms : 60 % of invoice amount - 45 Days from invoice date & 60 % of invoice amount - 90 days from invoice date.

Queries:

1. Since there will be different drafts for each tenor, can the bank partially co-accept the bill against one draft only? (I.e. only for payment towards one tenor)
2. Can the co-acceptance be done after payment is done towards first draft/tenor.

Thanks & Regards,
Hari
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picant
Posts: 1963
Joined: Wed Aug 20, 2008 1:49 pm

Re: Mixed Payment Terms - Co-Acceptance

Post by picant »

Hi Pal,

I understand that the coll amount will be paid by two bills of exchange, accepted by drawee and avalised by a bank.

Maturing 60% after 45 days invoice date and 40% after 90 days invoice date. You will deliver documents after acceptance, and bank aval, keeping the bills for collection at maturity or remit the accepted and avalised bills to remitting bank for its own usage.
If not hold by you, the remitting bank will present bills some days before maturity for payment.
Other comments appreciated(consider acting as per URC 522),
Ciao
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