2 min read
Definition
A trade creditor is a supplier a business owes money to for goods or services received on credit. The total of all trade creditors is your accounts payable — and the trade credit they extend is often your largest source of short-term finance.
In plain terms
When a supplier delivers on 30-day terms, they become a trade creditor until you pay. Taking the full agreed term keeps their cash working in your business at no cost — as long as you never pay late.
Why it matters
Balancing what you owe trade creditors against your own cash needs is central to working capital. See aged creditors and trade debtor.
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