A supplier is a busines person / agency that sells goods or services. When the customer buys the goods or services in cash, then the transaction ends then and there. But when the customer buys the goods or services with a "promise"/"commitment" to make the payment at a later date, say after "n days", then we say that the Supplier has given a _credit_ of "n days" to the customer.

This deferred payment amount is termed as "supplier credit", and appears as "Outstanding Payable" in the balance sheet of the customer, and as "Outstanding Receivable" in the balance sheet of the supplier.

Hth.



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Note added at 7 mins (2004-06-09 09:18:26 GMT)
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Please change \'busines\' to \'business\'.

The site below has quite a good definition, which I hope I've managed to sum up reasonably well above. A supplier sends you an item and gives you a certain amount of time (say 30 days) to pay for that item. That's it in a nutshell, really.

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Note added at 7 mins (2004-06-09 09:18:46 GMT)
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This is as opposed to paying for the item on the spot, or soon as you have taken delivery of it.

So if, say, you buy a TV set, but the supplier/vendor sends you the set and gives you 30 days to pay for it, that\'s supplier credit, basically.

Also the agreement of a supplier of goods or services to deferred repayment terms.

Supplier credit
Definition: Self-financing of a supplier's operations. Also the agreement of a supplier of goods or services to deferred repayment terms.