D · 2
Documents against acceptance (D/A) D/A
The deferred form of documentary collection: the buyer obtains the documents – and therefore the goods – by accepting a time draft (e.g. 60 days) and pays at maturity. The seller is left holding only the accepted draft and loses control of the goods, so the risk is close to open account; D/A is usually combined with credit insurance or a bank aval guaranteeing the draft.
Documents against payment / Cash against documents (D/P – CAD)
A collection method in which the seller sends the documents of title – above all the original bill of lading – through its bank to the buyer’s bank, which releases them only when the buyer pays; it is governed by URC 522. It is cheaper than a letter of credit, but no bank guarantees payment: if the buyer refuses the documents, the goods sit at the destination port and the seller faces demurrage, return freight or a distressed sale. Suitable for trusted, long-standing relationships.