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Trade Finance & Payment

Open Account

Also known as: O/A, Open Account Terms

Open account is a sale in which the exporter ships the goods and sends the invoice with payment due at a later agreed date — commonly thirty, sixty, or ninety days after shipment or delivery — extending unsecured credit to the buyer. It is the most buyer-friendly and competitive payment method and dominates trade between trusted partners and within supply chains, but it places the risk of non-payment squarely on the seller. Exporters mitigate that risk with credit insurance, factoring, or supply-chain finance, turning the receivable into cash or transferring the default risk to a third party.

The JFS takeLicensed customs broker · Filer 82G

The dominant term in established trade, and pure credit risk on the seller. From a customs standpoint it is the cleanest arrangement there is — the price paid or payable is exactly what the invoice says, with no financing structure to unpick.

Related terms

Cash in AdvanceCash in advance is the payment method most favorable to the exporter, under which the buyer pays for the goods, in full or in part, before they are shipped, eliminating the seller's risk of non-payment entirely.Documentary CollectionA documentary collection is a payment method in which the exporter entrusts the shipping documents to its bank with instructions to release them to the importer only against payment or against acceptance of a draft, using the banking system as a conduit rather than a guarantor.FactoringFactoring is a financing arrangement in which an exporter sells its short-term accounts receivable to a specialized finance company, the factor, at a discount in exchange for immediate cash.

Reviewed by a licensed customs broker. Definitions are general information, not legal or customs advice for a particular shipment. Duty rates, tariff programs and agency requirements change frequently.