Do you have questions you would like answered by your peers in the proformative community?

Anonymous Advisor

Are credit/purchasing card payments treated as trade receivables?

Asked on May 6, 2015

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 President • May 6, 2015

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.

Want to join the conversation? Submit an answer or ask a question by emailing us at [email protected]

Submit an answer