What is a key benefit of using document collection as a payment method?

Using document collection as a payment method offers notable flexibility in payment terms, which is a key benefit. This payment approach allows the seller to ship goods to the buyer while retaining documents that are needed for the buyer to take possession of the goods. The payment can be structured according to the agreed terms, allowing both parties to negotiate the timeline and conditions surrounding the payment.

For instance, buyers may be allowed to examine the goods and confirm their quality before completely processing the payment, making it an appealing option for businesses that want to mitigate the risk associated with large transactions. This flexible arrangement can help facilitate trust and accommodate varying cash flow situations on the buyer's end.

While other methods such as guarantees of payment or reduced risk to banks offer valuable advantages, the unique aspect of document collection is that it provides both parties with the ability to negotiate and adjust terms according to their circumstances, making it a particularly advantageous payment method in international trade scenarios.