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Open Account
(Hoang Hang) - Coggle Diagram
Open Account
(Hoang Hang)
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Advantages
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For exporters
Increased sales: make more attractive to importers, leading to increased sales volume
Easier market penetration: Helps exporters enter new markets where prepayment or letters of credit may not be practical
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Disadvantages
For exporters
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Potential for disputes: Disagreements about the quality or quantity of goods leading to payment delays or disputes
High risk of non-payment, leading to financial losses
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For importers
Potential penalties for late payment imposed by exporters, which can add to the importers's costs.
Non - delivery, late delivery
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Conclusion
Will work best when built on mutual trust and a clear understanding of the risks and responsibilities involved
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