Documentary collection and Mid-sized companies: Difference between pages

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(DC).
Smaller, large companies.


An international payment method that processes the collection of a draft and accompanying shipping documents through international correspondent banks.
Often firms are classified as small, medium or large. Different definitions of the categories apply for different purposes, in different jurisdictions and in formal and informal use.


A documentary collection is a structure under which a bank collects payment from a seller, by presenting documents to the buyer.
A common grouping is [[Small and Medium-sized Enterprises]] (SMEs). They may benefit from easier financial reporting requirements, tax provisions or eligibility for various government-provided support.


Most firms are small, some are medium-sized and few are large. But the size of firms in the large category vary greatly. It has become useful to distinguish smaller large companies for some purposes.


Compared with letters of credit (LCs), documentary collections (DCs) are used for smaller transactions, and a smaller total value of transactions.
For example, in European Union usage, SMEs do not exceed €43m in turnover while large companies turn over many billions. Opportunities of many kinds vary materially with a firm's size, for example, the available range of investment and financing opportunities.


DC and LC indicative data is summarised below.


=====Average transaction sizes (US exports)=====
No doubt terminology will continue to develop until its use in law and regulation makes further change more difficult or confusing.
DCs: US$ 0.1 - 0.2 million


LCs: US$ 0.5 - 1 million
[[Category:The_business_context]]
 
=====Proportion of world trade in goods=====
DCs: 1 - 2%
 
LCs: 10 - 15%
 
 
== See also ==
* [[Cash against documents]]
* [[Collecting bank]]
* [[Commercial risk]]
* [[Correspondent banking]]
* [[Documentary credit]]
* [[Documents against acceptance]]
* [[Documents against payment]]
* [[Draft]]
* [[Letter of credit]]
* [[Remitting bank]]
* [[Twenty-Foot Equivalent Unit]]
 
 
===Other link===
[http://voxeu.org/article/trade-finance-around-world Trade finance around the world, Centre for Economic and Policy Research, 2016]
 
__NOTOC__
 
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Trade_finance]]

Revision as of 11:17, 16 July 2019

Smaller, large companies.

Often firms are classified as small, medium or large. Different definitions of the categories apply for different purposes, in different jurisdictions and in formal and informal use.

A common grouping is Small and Medium-sized Enterprises (SMEs). They may benefit from easier financial reporting requirements, tax provisions or eligibility for various government-provided support.

Most firms are small, some are medium-sized and few are large. But the size of firms in the large category vary greatly. It has become useful to distinguish smaller large companies for some purposes.

For example, in European Union usage, SMEs do not exceed €43m in turnover while large companies turn over many billions. Opportunities of many kinds vary materially with a firm's size, for example, the available range of investment and financing opportunities.


No doubt terminology will continue to develop until its use in law and regulation makes further change more difficult or confusing.