What is Open Account?
"Open Account" refers to a payment arrangement between a buyer and seller, where the buyer pays for goods or services at a later date, usually within a specified period, after receiving them. This is different from other payment methods, such as cash in advance or letter of credit, where payment is made before the goods are shipped or received. In an open account arrangement, the seller trusts the buyer to pay the invoice on time based on their previous business relationship and credit worthiness.
