Creditors

Creditors are individuals or organisations to whom a business owes money — typically for goods, services, or loans provided on credit terms.

They represent the company’s outstanding obligations and appear on the liabilities side of the balance sheet. Managing creditors effectively is important for maintaining cash flow and supplier relationships.

Example:

If a business buys £20,000 of stock on 30-day payment terms, the supplier is recorded as a creditor until the invoice is paid.

Used in:

Accounts payable, cash flow management, and financial reporting.