An open account transaction in international trade as per LC

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An open account transaction in international trade is a sale where the goods are shipped and delivered before payment is due, which is typically in 30, 60 or 90 days. Obviously, this option is advantageous to the importer in terms of cash flow and cost, but it is consequently a risky option for an exporter.
An open account transaction is a sale where the goods are shipped and delivered before payment is due. Obviously, this option is the most advantageous for the importer in terms of cash flow and cost, but it is consequently the highest risk option for an exporter.
An open account transaction in international trade is a sale where the goods are shipped and delivered before payment is due, which is typically in 30, 60 or 90 days. Obviously, this option is advantageous to the importer in terms of cash flow and cost, but it is consequently a risky option for an exporter.
An open account transaction means that the goods are shipped and delivered before
payment is due, usually in 30 to 90 days. Obviously, this is the most advantageous
option to the importer in cash f low and cost terms, but it is consequently the highest
risk option for an exporter. Because of the intense competition for export markets, foreign
buyers often press exporters for open account terms. In addition, the extension of credit by
the seller to the buyer is more common abroad. Therefore,
exporters who are reluctant to extend credit may face
the possibility of the loss of the sale to their competitors.
However, while this method of payment will definitely
enhance export competitiveness, exporters should thor
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oughly examine the political, economic, and commercial
risks, as well as cultural inf luences to ensure that pay
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ment will be received in full and on time. It is possible to
substantially mitigate the risk of nonpayment associated
with open account trade by using such trade finance tech
-
niques as export credit insurance and factoring. Exporters
may also wish to seek export working capital financing to
ensure that they have access to financing for both the pro
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duction for export and for any credit while waiting

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