Open Account
Category: Payments
Definition (plain English)
A credit arrangement where the seller ships or delivers first and the buyer pays later under agreed invoice terms such as net 30, net 60, or another due-date rule.
Why it matters commercially
Open account supports buyer cashflow and repeat trade, but it shifts credit, dispute, country, collection, and working-capital risk to the seller.
Example
An exporter approved net 45 only after setting a credit limit, checking buyer references, confirming import capability, and documenting what happens if invoices are disputed.
Common mistake
Offering open account to a new buyer without credit approval, document-release control, insurance review, overdue escalation, and a hard stop on further shipments.
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