Checklist for Cash Against Documents process

checklist

Introduction

Following the steps accurately in the Cash Against Documents (CAD) process is essential for ensuring a smooth and successful transaction. The CAD process involves the exchange of payment for shipping documents, which grant the buyer ownership of the goods. Any deviation from the established procedure can lead to delays, disputes, or even financial losses. Therefore, adhering to each step with precision not only safeguards the interests of both the buyer and seller but also helps maintain trust and transparency throughout the transaction. By meticulously following the CAD process, all parties can achieve a secure and efficient exchange, minimizing risks and ensuring that the transaction is completed as intended.

Preparation and Document Review:

• Confirm the terms and conditions of the sales agreement with the buyer.

• Prepare the commercial invoice, including accurate information about the goods, quantities, prices, and payment terms.

• Create a detailed packing list outlining the contents of the shipment, including package details, weight, and dimensions.

• Prepare the bill of lading with information on the carrier, departure and destination ports, consignee details, and other necessary shipping information.

• If required, generate any additional documents such as certificates of origin, inspection certificates, or insurance certificates.

• Verify the accuracy of all documents, including names, addresses, quantities, and product descriptions.

• Ensure that all documents are signed, stamped, or authenticated as needed.

  
  

Submission to Seller's Bank:

• Submit the Cash Against Documents documents to your bank in your home country, specifying the transaction and relevant instructions.

• Include a cover letter explaining the purpose and details of the CAD transaction.

• Maintain a copy of the submitted documents for your records.

Document Transmission to Buyer's Bank:

• Confirm with your bank that the documents have been sent to the buyer's bank.

• Monitor the transmission process and ensure the documents are received by the buyer's bank.

Payment Release and Document Handover:

• Await confirmation from the buyer's bank that the documents are in order and payment will be released.

• Receive the payment in accordance with the CAD agreement.

• Promptly provide any additional documentation or information requested by the buyer's bank.

• Once payment is received, provide the buyer with the documents needed to claim the goods from the shipping carrier.

Post-Transaction Follow-Up:

• Maintain records of the CAD transaction for auditing and reporting purposes.

• Communicate with the buyer to ensure they have successfully claimed the goods.

• Resolve any discrepancies or issues that may arise during the payment or document verification process.

Optional - Use of Trade Finance Experts:

• Consider seeking assistance from trade finance experts or professionals with experience in international trade transactions to facilitate the process and mitigate risks.

Conclusion

This checklist can be customized to meet your specific requirements and preferences, ensuring that it aligns with your unique CAD document processing needs. It’s important to review and update the checklist regularly to maintain its effectiveness, as procedures and regulations may evolve over time. By keeping the checklist current, you can ensure that your CAD document processing remains accurate, efficient, and compliant with any changes in the industry or your business operations.