more-arw search

Q&A Forum

Are credit/purchasing card payments treated as trade receivables?

So if I pay my suppliers with a purchasing card (Visa/MC/AMEX) how is that payment treated? Meaning if it is considered a “trade receivable” and millions of dollars are paid to suppliers, wouldn’t the account treatment have the net effect of helping to clean-up my balance sheet??? Is there a benefit from an accounting perspective to a buyer use a purchasing card?

Answers

Bob Leonard
Title: President
Company: Strategic Business Services
(President, Strategic Business Services) |

When you make the payment to the supplier, you clear that A/P and create a new A/P to the credit Card Co. which remains open until you have paid the Credit Card Co. If the obligation is wi the Credit Card Co on day one then it would look like any other A/P until it is paid. So there would be no impact on the total liability or total A/P.

854 views
Topics
Products and Companies

Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email content@proformative.com to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.