Mitigating the risks of open account trade

More regional companies are turning to supply-chain financing as they take a broader approach to risk mitigation.

It’s not just banks that are raising their games when it comes to risk management. Economic uncertainty and more stringent regulatory requirements are prompting companies to take a much closer look at their risk exposures.

But this is happening just as open account trade is increasingly common practice. Open account transactions means that widgets are shipped and delivered before the payment is due. Typical credit terms are for 30 to 90 days. Obviously, this is exactly what the importer wants an opportunity to get the products and maybe even sell them before having to pay the bill. But it is risky for an exporter. But bankers say that open account...

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