Meaning & use
trade debt
Last updated
Meanings
nouncountable or uncountablebusinessfinance
Money that a company is owed by its customers for goods or services it has already supplied.
Grammar: Use it as uncountable for the total amount and as countable for individual customer amounts: trade debt is rising; three trade debts are overdue.
Patterns
- trade debt of an amount
- collect trade debt
- trade debt outstanding
- trade debtors
The company's trade debt rose sharply after it offered longer payment terms to buyers.
At the end of the quarter, trade debt stood at two million dollars.
She spends most of her mornings chasing trade debt from late-paying customers.
nouncountablebusinessfinance
A single amount owed by one customer to a supplier for goods or services bought on credit.
Grammar: Often used in the plural when talking about several customers' unpaid invoices: the auditor listed the trade debts.
Patterns
- a trade debt of an amount
- settle a trade debt
- write off a trade debt
The firm wrote off a trade debt of $40,000 after the buyer went bankrupt.
He settled the trade debt within thirty days to keep his credit rating strong.
Word forms
| plural | trade debts |
|---|
Common combinations
- trade debt outstanding
- The report shows trade debt outstanding at the year end.
- collect trade debt
- The finance team works hard to collect trade debt on time.
- trade debtors
- Trade debtors appear as a current asset on the balance sheet.
- bad trade debt
- Bad trade debt must be written off against profits.
- trade debt financing
- The bank offers trade debt financing to cover slow-paying customers.
Synonyms and how they differ
- accounts receivable
- The accounting term for the total money owed by customers; trade debt is the everyday business phrase for the same idea.
- receivables
- A shorter accounting term used mainly in financial statements; trade debt is more common in general business talk.
- debtor balance
- Refers to one customer's unpaid amount; trade debt can mean either one customer's amount or the total owed.
Opposites
Word family
- trade debtor noun
- A customer who owes money to a supplier for goods or services bought on credit.
- trade creditor noun
- A supplier that is owed money by a customer for goods or services supplied.
- trade credit noun
- The arrangement allowing a buyer to pay later for goods or services.
Commonly confused: trade debt or trade deficit? trade debt or national debt?
trade debt vs trade deficit
A trade deficit is the gap between a country's imports and exports, not money owed by customers to a company.
trade debt vs national debt
National debt is money a government owes; trade debt is money a business is owed by its customers.
Practice
The finance director reported that trade debt ______ by 15 percent because customers were paying late.
Choose one answer.
'Risen' is the correct past participle of the intransitive verb 'rise' (to go up), and trade debt increases on its own. 'Raised' needs an object, 'been risen' is not passive, and 'arose' means 'happened' or 'came up', not 'increased'.
Make it your own
Write a sentence using “trade debt”, then check it and compare it with the examples above.