Open Account (O/A) is a payment method in international trade based on the buyer's credit. The seller ships the goods first, and the buyer pays at an agreed time (e.g., 30, 60, or 90 days) after receiving the goods or documents. Usage scenarios: commonly used when the buyer and seller have a long-term cooperative relationship and mutual trust, or in a buyer's market with fierce competition, where the seller adopts it to secure orders. Precautions: The seller bears significant credit risk and may face buyer default, refusal to pay, or bankruptcy; it is advisable to conduct a buyer credit investigation, insure export credit, or use a combination of factoring, letters of credit, etc., to reduce risk. Differences from other terms: Compared with T/T, O/A is payment after goods arrive, while T/T usually requires prepayment; compared with L/C, O/A has no bank credit guarantee and relies on commercial credit; compared with collection (D/P, D/A), O/A does not require document presentation through a bank, making the process simpler but riskier. In short, O/A is flexible but risky, and the buyer's credit must be carefully evaluated.
📝 Examples
1. We have cooperated with your company for many years and agree to use open account for this order, with payment terms of T/T within 60 days after the invoice date. (Note: The seller grants the buyer a 60-day credit period based on long-term trust.)
2. Due to fierce market competition, in order to win new customers, we propose accepting O/A 30 days for the first order, but a bank credit reference is required. (Note: The seller uses open account as a preferential condition but requires the buyer to provide credit assurance.)
💡 Foreign Trade Tips
Foreign trade terms are the foundation of international business communication
Trade practices may vary slightly by country; pay attention when using them
When using terms in contracts, specify the applicable version (e.g., Incoterms 2020)
For unfamiliar terms, use GlobalSync's multilingual email helper to confirm with your partner