What are trade creditors?

Trade creditors (definition)

Trade creditors are the bills you need to pay. They’re sometimes called creditors, trade creditors or accounts payables. Trade creditors might also refer to the suppliers you owe money to.

It might help to think of trade creditors as bills that your business hasn't paid yet. You might owe a supplier for raw materials, for example. Or you may owe money for an unpaid electrical or phone bill.

Let’s say you buy some materials from a supplier on credit. They’ll send you an invoice for those materials. In your records, the amount on that invoice is part of your trade creditors. In your supplier’s records, that invoice will be part of their trade debtors. In this way, trade creditors and trade debtors are two sides of the same transaction.

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This glossary is for small business owners. The definitions are written with their requirements in mind. More detailed definitions can be found in accounting textbooks or from an accounting professional. Xero does not provide accounting, tax, business or legal advice.