Documentary Collection Cost Calculator

Work out documentary collection cost instantly with clear inputs, formula shown and shareable results.

About Documentary Collection Cost Calculator

Documentary collection routes shipping documents through banks against payment or acceptance, without any bank guarantee of payment. It is far cheaper than a letter of credit precisely because the bank takes no credit risk.

Formula

Collection cost

Cost = max(bill × fee rate, minimum fee) + courier and messaging charges

Worked example

With the default values below, Documentary Collection Cost Calculator returns Total Collection Cost of $14,500.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Bill Valueminimum 0: 8,000,000
Collection Feeaccepts 0–2 %: 0.15 %
Minimum Feeminimum 0: 1,500
Courier And Messaging Chargesminimum 0: 2,500

Results

Total Collection Cost: $14,500.00
Collection Fee Charged: $12,000.00
Courier And Messaging Charges: $2,500.00
Cost As Share Of Bill Value: 0.18125%

Step by step

1Values used
2Collection cost
3Total Collection Cost= 14,500.00
4Collection Fee Charged= 12,000.00
5Courier And Messaging Charges= 2,500.00
6Cost As Share Of Bill Value= 0.18125

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or compounding frequency into account.
Figures are rounded for display to 5 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

Frequently Asked Questions

How does it differ from a letter of credit?

Under a collection the bank only handles documents. Under a letter of credit it undertakes to pay, which is why it costs far more.

What is the exporter's risk?

The buyer can simply refuse the documents, leaving goods at a foreign port with no payment obligation triggered.