Open Account

• An open account is an unsecured credit extended to the buyer.
  • It should only be used with well-established customers with excellent credit ratings.
  • Payment terms should be clearly state when payment is due.
    • Net 30.

• Because an open account is the perferred term from the buyer's perspective it is easy to negotiate.

• Disadvantages of an open account are:
  • No assurance of payment.
  • Loss of possession of goods.
  • Difficulty of collection.

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© 2004 John Michael Pierobon

Notes