International Payments

What is an open account payment?

An open account payment is made by check, draft or wire transfer to a seller after the product is shipped to the buyer, and generally after the product is received by the buyer. In an open account transaction, the seller ships goods to a foreign buyer who may then take delivery of and inspect the goods. Payment for the product shipped and received will occur on (but usually after) a date that has been agreed in advance by the foreign buyer and the U.S. seller, for example 30 days from the invoice date.

Open account is the most desirable payment method for a company that is buying a product internationally, but it is the least desirable payment method for the seller. There is little that the U.S. seller can do in an open account transaction to compel a foreign buyer to make a timely payment or to make any payment once the buyer is in possession of the goods that have been shipped.

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