The Uniform Rules for Collections formulated by the International Chamber of Commerce define collection as follows: Collection means the processing of financial documents and/or commercial documents by a bank that receives a collection instruction in accordance with the instructions received in order to obtain payment or acceptance, or to hand over commercial documents against payment or acceptance, or to hand over documents against other terms or conditions.
Financial documents refer to bills of exchange, promissory notes, checks, payment receipts or other documents used to obtain payment or funds.
Commercial documents refer to invoices, transport documents, property documents or other similar documents, or other documents other than financial documents.
Collection is generally handled by banks, so it is also called bank collection. The basic practice of bank collection is that the exporter first ships the goods according to the sales contract, then draws a bill of exchange (or does not draw a bill of exchange) together with commercial documents, and applies for collection to the bank in the export place, entrusting the bank in the export place (collection bank) to collect the payment from the importer through its agent bank or correspondent bank (collection bank) in the import place.