Documents against Acceptance (D/A)
A documentary collection method where documents are released to the buyer against acceptance of a time draft.
D/A (Documents against Acceptance) is a documentary collection method where the presenting bank releases documents to the buyer upon their acceptance of a bill of exchange (draft) at a specified maturity (30, 60, 90 days, etc.).
Unlike D/P, the buyer obtains the documents and goods before paying. They commit to paying at the draft's maturity. This mechanism extends trade credit to the buyer.
D/A carries significant risks for the seller:
- The buyer possesses the goods without having paid
- Non-payment at maturity is a real risk
- The accepted draft is not a bank undertaking
- In case of default, remedies are limited and expensive
To mitigate these risks, the seller may require the draft to be avalised by the buyer's bank (bank commitment on the draft), or take out export credit insurance. D/A should only be used with long-standing partners and for manageable amounts.