Final answer:
In U.S. domestic trade, the typical payment procedure for established customers is an open account, which allows them to make transactions on credit with a set period for payment.
Step-by-step explanation:
In U.S. domestic trade, the typical payment procedure for established customers is an open account. This method allows for transactions on credit with payment to be made within a specified period.
It contrasts with other methods such as a letter of credit, which is used in international trade and provides a guarantee from the buyer's bank to the seller's bank upon shipment of goods.
A bill of exchange is a written order binding one party to pay a fixed sum to another party on demand or at a predetermined date. Cash in advance requires payment before the delivery of goods or services, which is less common for established customers.
Forfaiting involves the purchase of receivables and is typically used in international trade finance.
It is important to note that established customers often receive the benefit of purchasing on an open account because there is a level of trust and a transaction history that reduces the risk of nonpayment for the seller. This method facilitates easier and quicker transactions, promoting better business relationships and efficiency in trade.