Where the importer has no legal commitment to the exporter and fully controls the means and timing of payment in respect of goods or services received.
A trade arrangement under which goods are shipped by an exporter without guarantee of payment. This is similar to offering credit to a UK customer, with the exporter bearing all the risks of offering credit. Open account payment should only be used if you have an established relationship with the buyer and is typically for exports within the EU.
Shipping your merchandise to the consignee in the foreign country with no guarantee of payment. Unless the buyer is of unquestionable integrity an open account can be somewhat risky for the seller.
An account that is still active or still being paid.
a negotiated agreement between you and your buyer, with terms specifying how much the buyer can order and when the buyer will make payment
a very risky form of international transaction for the exporter because of the idea that the importer, upon receiving the goods, will not pay the exporter
An account that is active or still being paid. Back to Glossary Index
Method of paying in international trade which involves keeping an account for a seller or buyer. Fairly risky.
Goods are shipped to a buyer before the Canadian exporter receives payment. This is most common for Canadian exporters selling into the U.S. To reduce the risk in this, some banks will buy accounts receivable from exporters.
The seller delivers the goods to the buyer and then bills the buyer according to the terms of trade.
A trade arrangement in which goods are shipped to a foreign buyer without guarantee of payment. The obvious risk this method poses to the supplier makes it essential that the buyer's integrity be unquestionable.
Under an open account sale, goods/services and accompanying documents are supplied to the buyer with payment due at a later date (however generally no more than 180 days after the invoice date) without the existence of a formal debt instrument.
An account with a creditor that is still on the books and, in the opinion of the original creditor, collectible. These types of accounts usually are reported/updated to the credit bureaus and report late payments. They can be the most difficult to negotiate with a creditor.
An account that is active, still in use, or is still being paid.
Credit extended that is not supported by a note, mortgage, or other formal written evidence of indebtedness.
Under an open account arrangement, the seller ships merchandise to the consignee in the foreign country with no guarantee of payment. Unless the buyer is of unquestionable integrity an open account can be risky to the seller.
A charge account for which payment is required in full within 30 days.
A financial term meaning trade credit has been extended by an exporter to an importer of merchandise. Compare "Account."
A trade arrangement in which goods are shipped to a foreign buyer without guarantee of payment such as a note, L/C, or other formal written evidence of indebtedness.
Arrangement whereby sales are made with no formal debt contract. The buyer signs a receipt, and the seller records the sale in the sales ledger.
A means of payment whereby the exporter extends credit directly to the importer. The goods are delivered and payment is provided for at some specified future date, without the buyer issuing any negotiable instrument evidencing his legal commitment. The final payment by the buyer is via cheque or money transfer, with the bank's role being limited to moving the funds from the buyer to the seller. In some cases, the open accounts receivable may be discounted with a financial institution. An open account transaction requires the seller to have absolute trust in the integrity of the buyer, since the seller assumes all the risks of the transaction, as opposed to cash in advance. Open account is thus common in markets characterized by long-standing commercial relationships between the two parties. Français: Compte ouvert Español: Cuenta abierta
Trading on the basis that payment will be debited to the customer's account and settled on the basis of the payment terms applicable to that account.
