Open Account
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Deferred payment without bank intermediation.
Definition
Open Account represents 80% of international trade by value — preferred instrument between established partners. Risks mitigated via Credit Insurance (Atradius, Euler Hermes), factoring, BPO (Bank Payment Obligation), supply chain finance.
Origin
Traditional commercial mode ; standardised by Incoterms 2020.
Example in context
Bosch buys from ZF in France with Open Account terms 60 days end-of-month.
Related terms
- Letter of Credit — alternative instrument.