Suppliers's credit

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Birendra

Birendra (Querist)

15 June 2010 Can anyone please elaborate what is a suppliers' credit?

Regards

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

15 June 2010 Supplier`s Credit is the Credie limit given by the supplier to the company for purchasing the Goods from the supplier, up to that limit the company can avail credit facility from supplier and purchase the goods

Rahul Gupta

Rahul Gupta (Expert)

15 June 2010 An agreement between a supplier and a buyer whereby the supplier defers payment. That is, supplier credit occurs when the supplier accepts installment payments for the supplies he/she sells.

Ii is also expressed as a financing arrangement under which an exporter extends credit to a foreign importer to finance his purchase. Usually the importer pays a portion of the contract value in cash and issues a Promissory note or accepts a draft as evidence of his obligation to pay the balance over a period of time. The exporter thus accepts a deferred payment from the importer, and may be able to obtain cash payment by discounting or selling the draft or promissory notes created with his bank. Compare with Buyer’s credit