The following are a few advantages which the seller receives through the use of acceptances in substitution of the open book account.

The Acceptance Provides A Liquid Asset

What is of very great importance to the seller in the use of the acceptance, is the fact that he thereby gains a means of realizing upon his open book accounts, in rapid time, if necessary. Under the open book account method, there are two means which the seller may avail himself of, in order to secure funds, the first being the discounting of his own paper or promissory note, and the second, selling or assigning his open book accounts. The disadvantages of these two methods of realizing upon the seller's assets not only cause a loss of time, but result in unprofitableness to him, for the procedure in the second method of assigning accounts is a costly one, besides conveying an unbusinesslike impression. Neither does the giving of a seller's note gain for him the privileges which the acceptance does.

The trade acceptance, however, gives to the account liquidity, and the seller may realize upon it at any time, through the process of discounting. His capital assets are thereby put into liquid shape. The use of the trade acceptance would remove the necessity of the manufacturer or jobber, with somewhat limited capital, to borrow so heavily, in order to act as banker in supplying credit to customers, and a broader market would be opened for his paper at most favorable rates.

Acceptance Relieves Seller From Financing Customer

Under the open book account method, considerable burden has to be carried by the seller of merchandise, in that he is obliged to practically finance the buyer, through means of credit extensions. His operations are, as a result, limited and he must wait until he realizes upon the buyer's obligations. The open book account method, moreover, does not afford any liquid asset to the seller, and for this reason, a like burden is imposed upon him in the financing of his own business.

By the trade acceptance method the seller may dispose of the acceptances representing the accounts of the buyer, obtaining thereby available funds according to his needs and thus relieving him from financing the buyer. This is accomplished by discounting his acceptances.

Acceptance Creates A Systematic Basis Of Income On Seller's Assets

A seller receives great benefit from having his accounts in the form of acceptances, as he then knows that he will receive stipulated sums of money as the acceptances mature. He is, therefore, enabled to conduct his business along the lines permitted by the extent of his capital and income. The seller is, moreover, relieved from unnecessary worries, knowing that at each maturity, he will have so much with which to continue the operations of his business. In other words the seller has more certainty as to payment at definite periods.

Acceptance Tends To Confine Borrowing To Funds Actually Needed

Sellers invariably find themselves in need of funds at different times, with which to tide them over some difficulties in their financing. If they are forced to dispose of their assets in the form of open book accounts, in the limited ways open to them for this purpose, they will find that the operation is a very costly one.

At one stated period, a seller may be in need of a limited amount of funds, but if he must count upon realizing on his open book accounts, the safest way is generally to figure the amount of money to come in as much less than is owing to him. The result is that he is forced to borrow more funds than are actually needed to carry on his business. With the acceptance, this condition is remedied as the seller knows the exact amount of money that will come in as a result of their maturing.

One advantage of the acceptance, and to which bankers and business men throughout the country, who, as users and advocates of the acceptance will testify, is that trade acceptances are generally met promptly when they fall due. In rare cases is an extension of time required or asked for.