Is an open account the most risky for an importer?

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pohnpei397 eNotes educator| Certified Educator

No, an open account is not the most risky for the importer.  In fact, it is the most risky for the exporter.

In an open account, the importer gets the goods from the exporter long before they actually have to pay for those goods.  They may have as much as 60 days in which to pay.  This is not a particularly risky form of financing.  It is not like the forms of financing in which the importer has to pay upon (or even before) the delivery of the goods.  Therefore, we cannot say that this is the riskiest form of export financing from the point of view of the importer.

 

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