Open Account

Open Account is a trade arrangement where goods are shipped and delivered before payment is due. It involves trust based on established business relationships. Significant instances include exports, imports, and domestic transactions.

Buyers receive goods and commit to payment at a later date defined by the contract terms. This method helps facilitate smoother transactions by reducing immediate financial strain on buyers.

Sellers bear the risk of non-payment, demanding thorough credit checks. In this setup, clear documentation such as invoices, shipping notices, and contracts is crucial for maintaining records and legal enforceability.