A sale transaction where the goods are shipped and delivered, while payment is deferred for a future date, which is usually after 30 to 90 days. An importer can buy goods by having an open account with an exporter who undertakes to ship them, along with the necessary documents. The importer should already have agreed to pay the exporter’s invoice at a preset date. Open account terms may be particularly instrumental in winning customers in competitive markets, and may be combined with an appropriate trade finance technique that mitigates the risk of default on payment.
February 13, 2022
