The term collection refers to the debiting of commission, either from a receivable account or a customer account. Under this head we shall discuss the following:

• The commission amount that is due to an LC can be collected on a Periodic or Non-periodic basis
• The collection method can be either immediate (advance) or some time in the future (arrears)

These attributes for a commission are specified for a product (through the Product Preferences screen).

Commission collection can thus be classified as:

• Periodic in advance
• Periodic in arrears
• Non-periodic in advance
• Non-periodic in arrears

Periodic commissions are collected in portions, over a period of time. Commission in this case is calculated on the basis of a set of parameters defined. The LC amount on which the commission rate is applied, will always be the LC Outstanding Amount, at the beginning of the period. When commission is collected on a periodic basis, it will be collected automatically based on the rate period specified. It will be collected at the beginning or end of each collection period, depending on whether it has to be collected in arrears or in advance. The commission for the last period is collected on the Expiry Date of the LC. This commission will be calculated till the Good Until Date of the LC. The system displays this override message even if the component is waived at the contract level.