What is a trade credit arrangement?

Quick answer

For Payment Times Reporting, a trade credit arrangement exists where payment is made, or can be made, at least one calendar day after the supply of goods or services.

What does this mean?

The important point is that the arrangement can still be a trade credit arrangement even where payment is actually made earlier. What matters is whether the agreed arrangement allowed payment to occur at least one calendar day after supply, or whether payment was in fact made at least one calendar day after supply.

Practical point

This means you should not classify payments simply by how or when they were ultimately paid. The underlying arrangement needs to be understood.

Other ways people ask this

• What counts as a trade credit arrangement for PTRS?
• When is a payment considered trade credit?
• Does payment have to occur after supply to count for PTRS?
• How do I know if a transaction is a trade credit arrangement?

Official sources

• Payment Times Reporting Guidance Materials
  Trade Credit Arrangements
  Paragraph: 112 · Example: 22 · Page: 32
• Worked Example – Standard Payment Times Report
  Glossary
  Reference: Trade Credit Arrangement (TCA)

Related guidance

• Do direct debits and EFT payments count for PTRS?
• Are deposits and milestone payments included in PTRS?
• Are disputed payments included in PTRS?

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