The benefits of Bills for Collection is that they mitigate the risks of open account to the exporters and over the advance payment to the importers. The handling of documents by banks in accordance with instructions received to obtain payment or any other instructions is called Bills for Collection. In other words, it allows the client to use their bank as an intermediary to collect payment from the importer for goods that the exporter has already sent. Preliminarily, collection instructions consist of either, but not limited to, D/P term (Documents against Payment) which means that settlement is due on presentation, in exchange for the shipping documents, or D/A term (Documents against Acceptance) which means that the settlement is due when the bill matures on the due date but without obligation for payment on the collecting bank, except when the collection is Avalised.
Bills for Collection is subject to the Uniform Rules for Collections by the International Chamber of Commerce publication number 522, and are considered a recognized means of handling documents for collection in international trade and adopted by all banks worldwide.