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What is a collection order?


What is a collection order? </a>

The collection order is a settlement document in an intermediary bank transaction, which is formed by the creditor for the bank.

By means of it, he will claim the amount of debt from the payer in an indisputable order.

The concept and essence of settlements for collection

Collection is the method of settlement betweenParties, in which not the supplier, and the bank receives the due amount or acceptance of payment from the buyer's bank. The basis for this is monetary, settlement or commodity documents. The demand for a bank from the creditor's side to demand the amount of debt from the debtor is effected through a collection order.
At the same time, banks in such operations act only as intermediary links and are not responsible for non-payment of documents by the buyer.
There are clear and documentary collection. In the latter case, documents are required that confirm the fact of delivery (invoices, invoices, etc.)
In international trade, collection is an assignmentBank to the exporter to receive payment from the importer when transferring supporting documents to him, and to transfer money to the exporter without obligations from banks. Unlike letters of credit, collection is used to establish a trust relationship between the seller and the buyer.
To reduce the risks of insolvency of the buyer and the impossibility of paying them encashment documents, suppliers often insist on providing them with a bank guarantee.

Concept and types of collection orders

Collection orders have a unified form in Russia under the number 0401071. They can be used in three main cases:
- when the indisputable order of collecting money is established by law - in this case the collection order should contain a reference to the law-
- for recovery under executive documents - inThe document should be a reference to the writ of execution, its date and case number, as well as the name of the body that issued the decision-such collection orders are accepted by banks only with an original or duplicate copy of the executive document-
- provided that the payer provides the bankThe right to debit funds in favor of the creditor (supplier) - for example, the payer writes to the bank an application authorizing him to issue collection orders to his supplier under the contract.
There are no-acceptance (write-off is carried outWithout the request of the account holder) and acceptance (write-off is made only after confirmation of the account holder) collection orders. Without acceptance letters, for example, can expose a tax or a pension fund in the detection of tax arrears. In this case, the banks do not consider the objections of the payers relating to writing off the money from their accounts in an indisputable order.

What is a collection order? Was last modified: June 20th, 2017 By Wapfaabn
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