Trade creditor definition
/What is a Trade Creditor?
A trade creditor is a supplier that provides goods and services to its customers on credit terms. A trade creditor typically analyzes the financial statements, credit reports, and payment histories of its customers when deciding how much credit to extend to them. If it no longer chooses to extend credit to a customer, then it is no longer a trade creditor in relation to that specific customer.
Presentation of Payables
The amounts owed to a trade creditor are stated on the balance sheet of a customer as a current liability, since these obligations are nearly always due within one year. Conversely, these payables are listed on the balance sheet of the trade creditor as a current asset, and are classified as a trade receivable.