DA and DP in shipping terms?

Answer 1

This where the exporter/seller sends a number of documents to the customer's bank; when the customer pays in full, the bank gives them the import and release documents (DP).

In some cases, the customer will sign a 'bill of exchange', which sets out a specific number of days to pay (E.g.: 90 days after collection). When the customer signs the bill, they will receive the import and release documents (DA).

This is an effective method of payment for small businesses, as it helps provide security for both the buyer and seller. You must be sure however, if allowing a number of days to pay, that the customer is reliable and creditworthy. Otherwise you may be left needing to claim in court to retrieve your money, which is especially difficult with foreign companies.