Creditor – A supplier who is owed money and therefore money will be going OUT of your bank account to pay them

(Pronounced kreh-dih-ter)

Just as credits in accounting record all the money flowing OUT of a bank account, a company will have a creditor list which will include all the businesses that have supplied a service or good or loaned money and who now needs paying.

The key to remembering what a creditor is, is to think money has to go OUT of the company’s bank account to pay the supplier.

CREDITOR – think OUT of the company’s bank account

To remember that creditor is OUT use the following mnemonic:

Don't take your credit card or (creditor) any other card out (out), you can pay them later.