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documents to the bank for the purpose of getting the payment from the
bank is called ‘negotiation of the documents’.

Bill of exchange is an order to the importer to pay a certain amount of
money to, or to the order of, a certain person or to the bearer of the
instrument.
It can be of two types: document against sight (sight draft) or
document against acceptance (usance draft). In case of sight draft, the
documents are handed over to the importer only against payment.

The moment the importer agrees to sign the sight draft, the relevant
documents are delivered. In the case of usance draft, on the other hand,
the documents are delivered to the importer against his or her
acceptance of the bill of exchange for making payment at the end of a
specified period, say three months.

On receiving the bill of exchange, the importer releases the payment in
case of sight draft or accepts the usance draft for making payment on
maturity of the bill of exchange. The exporter’s bank receives the
payment through the importer’s bank and is credited to the exporter’s
account.