A collection order is a settlement document with the help of which a certain amount of money is debited in an indisputable manner from the payer's accounts. In other words, collection payments are a kind of banking transaction that facilitates the receipt by the banking institution on behalf of the client on the basis of certain settlement documents of the due funds on behalf of the payer. In this case, we are talking about paying for goods and services received by such a payer when crediting them to his bank account. Collection can be defined as an order of a creditor (seller) to his banking institution to receive from the payer (buyer) directly or through another bank a certain amount of money or confirmation of payment of this amount on time.
Areas for the use of collection orders
Collection orders are applied:
- upon collection of funds in an indisputable manner established by the relevant legislation;
- when collecting debts to the budget by regulatory authorities;
- upon collection under executive documents;
- within the framework of the main contract stipulated by the parties, with the condition that the banking institution responsible for servicing the payer is entitled to write off his funds without his order.
The main types of collection documents
A collection order is a document presented by the payer for some settlements. In the specialized literature the following types of such papers are displayed:
- a pure collection to which a check or bill of exchange must be attached;
- documentary collection is presented by the act of acceptance of work or an invoice for the goods.
Upon receipt of the client’s request, the banking institution accepts the corresponding collection order. This is exactly the payment requirement that is applied to the account of the client (payer).
This banking transaction is carried out in combination with the acceptance of such a calculation. The specified form involves the immediate shipment of goods under the current contract, regardless of whether payment for it came from the buyer or not. The latter pays the cost of production upon receipt of the entire package of settlement documents with a preliminary check by the seller of its quantity, price and quality in accordance with the terms of the contract.
Filling a collection order
There is a special form for filling a collection order. So, with an indisputable procedure for collecting money within the framework of the legislation, it is necessary to indicate a reference to the relevant law as the purpose of payment .
When collecting according to executive documents, there are also some features in the filling, which are entered into the collection order. This is a reference to the date of such an executive document with the obligatory indication of its number, the case where the decision on enforcement is made.