Buyer Benefited By The Extension Of Credit Under The Acceptance Method

The buyer is able to extend his operations with greater facility through the acceptance than is possible under the open book account method. The advantages which the buyer receives from a reduced price of merchandise and from better credit and sales terms on the acceptance basis, permit him to conduct his business more economically and with a lower capital amount than is otherwise possible. He is then enabled to either sell his merchandise at an increased profit or increase his sales through lower prices, thereby greatly extending his business.

Buyer Does Not Waive Any Legal Rights Against Seller Which He Would Otherwise Enjoy Under Open Book Account Method

It is generally thought by buyers that the giving of an acceptance forces them to give up their legal rights which they otherwise retain under the open account. The buyer under the open account system can always contest the correctness of the details of the merchandise transaction, such as wrong deliveries, goods not up to standard, short weight, etc. By the giving of a trade acceptance, it is true that the buyer does obligate himself to its payment at maturity, but he thereby does not give up any legal rights against the seller if he pleads incorrect deliveries, short weights, or if he has other complaints against the seller contrary to the original intent of the parties at the time of sale. In contesting the validity of the transaction, he must however, prove his case affirmatively.

But this point, however regarded, should not be an obstacle in the way of adopting and using the acceptance method, for the buyer may satisfy himself as to all conditions of sale, express or implied, to see that they are correct in all details, before accepting.

The Buyer And The Banker. Acceptance Raises Banker's Estimation Of Buyer

The best bankers consider the trade acceptance method as far superior to the open account system, or to the single name paper method of financing business transactions. The appearance in the buyer's financial statement of "acceptances payable" instead of "accounts payable" convinces the banker that the buyer practices careful habits, that he is discretionary in his business, and that he is careful in his credit dealings. The use of the acceptance method by the buyer is looked upon by the banker as more businesslike than the open account method.