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Trade Financing Terms -
Open Account

Global connections anytime, anywhere


An open account transaction means that the goods are manufactured and delivered before payment is required (for example, payment could be due 14, 30, or 60 days following shipment or delivery). The method provides great flexibility and in many countries sales are likely to be made on an open-account basis if the manufacturer has been dealing with the buyer over a long period of time and has established a secure working relationship.

The open account method is a preferred settlement method of payment for the importer, since it places the risk on the exporter or seller. This method cannot be used safely unless the buyer is credit worthy and the country of destination is politically and economically stable. However, in certain instances it might be possible to discount open accounts receivable with a factoring company or other financial institution.

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