A collection document accompanies a shipment detailing essential information and associated payment obligations. Such documents provide a listing of everything in the shipment, with special notes if necessary, and the total due. This can include the costs for the products along with shipping and handling fees. Buyers and sellers can reference their records to confirm that they match when submitting payments and performing other activities. Unique reference numbers allow them to communicate about disputes and other issues.
Buyers receive a copy of the collection document with the shipment. It typically details the full contact information for buyer and seller, along with what was in the shipment. If the seller needed to make substitutions or put products on back order, this can be noted in the documentation. The law may require other disclosures, including payment terms. Many firms use standardized forms to ensure that all the legally required information will be present.
Documentation informs buyers how much money is due, and provide information about the deadline and where to submit it. They can also act as formal proof of transfer of ownership. By accepting the shipment and collection document, the buyer also agrees to pay. If there is a problem with the shipment, the buyer may need to file a claim within a set period of time to qualify for compensation, like a reduction on the bill to reflect the fact that the shipment was not complete.
In addition to buyers and sellers, other parties may want to see this document as well. Buyers who plan to use a line of credit for payment, for instance, may need to submit the collection document to prove that the shipment occurred and provide documentation. From the bank’s perspective, this can be important if the buyer later attempts to dispute the payment. Likewise, insurance representatives may request copies, as can shipping inspectors, who need documentation on what passes through their ports.
Such forms are often produced in multiple copies to allow sellers to retain their copies while providing buyers with multiples for records, submission with payment, and tendering to regulatory agencies, if necessary. Buyers should make sure the collection document copies they receive are accurate and complete, with all the necessary information. If there are discrepancies, they can bring this up with the sellers. Retaining such documents is advised to provide proof of the transaction in the event of disputes about ownership, payment, tax liability, and other issues.
