Trade creditors
Learn what trade creditors are, how they differ from trade debtors, and where they sit on your balance sheet.
Published Friday 24 July 2026
Table of contents
Key takeaways
- Trade creditors are the amounts you owe suppliers for goods or services you've received but haven't paid for yet. They're also called accounts payable or creditors.
- Trade creditors sit on your balance sheet as a current liability.
- They're the opposite of trade debtors: creditors are money you owe, debtors are money owed to you.
- Managing trade creditors well protects both your cash flow and your supplier relationships.
What are trade creditors?
Trade creditors are the suppliers you owe money to for goods or services you've received but haven't paid for yet. They're also called accounts payable or, more simply, creditors.
In everyday terms, trade creditors are the bills you haven't paid yet. If you buy raw materials from a supplier, take stock on credit, or run up a utility bill, that unpaid amount is a trade creditor until you settle it. Recording and settling these bills is part of your accounts payable process.
Trade creditors vs trade debtors
It's easy to mix up trade creditors and trade debtors, but they sit on opposite sides of a transaction. Trade creditors are money you owe; trade debtors are money owed to you.
When you buy on credit, your supplier records you as a debtor while you record them as a creditor. It's 2 sides of the same deal. The money your own customers owe you works the other way and is known as accounts receivable, which is why staying on top of unpaid customer invoices matters just as much as paying your suppliers.
Trade creditors on the balance sheet
On your balance sheet, trade creditors show up as a current liability. That's because you usually expect to pay them within 12 months.
The trade creditors figure is simply the total of all your unpaid supplier invoices at a given date. It feeds into liquidity measures like the current ratio, which compares what you owe in the short term with the assets you can use to cover it.
Examples of trade creditors
Trade creditors turn up in almost every business. Common examples include:
- raw materials bought from a supplier on credit
- an unpaid electricity, water or phone bill
- stock purchased on 30-day payment terms
- a service you've used, such as cleaning or delivery, that you'll pay for later
How to manage trade creditors
Managing trade creditors well keeps your cash flow steady and your suppliers on side. A few simple habits make it easier.
Track your due dates, pay on time, and keep a clear record of what you owe and when. Paying suppliers on time protects those relationships and can help you negotiate better credit terms down the track.
Software helps you keep the whole picture in view. With Xero, you can pay bills and schedule payments together, so you can plan around your cash flow and avoid missing a payment.
Keep on top of your bills with Xero
When you can see every bill and due date together, staying on top of trade creditors gets a lot easier.
Xero brings your bills, payments and cash flow into one clear view, so you can manage what you owe with less manual admin. Sign up and get one month free to see how it fits your business.
FAQs on trade creditors
Here are answers to some frequently asked questions about trade creditors.
Are trade creditors an asset or a liability?
Trade creditors are a liability, because they're money you owe to suppliers. They appear as a current liability on your balance sheet.
Are trade creditors the same as accounts payable?
Yes. Trade creditors and accounts payable both describe the money you owe suppliers for goods or services you've already received.
What's the difference between trade creditors and trade debtors?
Trade creditors are money you owe to suppliers, while trade debtors are money your customers owe to you. They're 2 sides of the same credit transaction.
Where do trade creditors appear on the balance sheet?
Trade creditors appear under current liabilities on your balance sheet. The figure is the total of all your unpaid supplier invoices.
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Disclaimer
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.