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Submitted by mariel32 on October 12, 2007

  • Category: Business
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Commercial Paper

Trade credit is one of the various forms of credit. It is considered short term credit and about forty percent of short term financing is in the form of trade credit. Usually the payment period lasts form thirty to sixty days. It is best to pay within thirty-five days, especially when a discount is offered. Cash discount terms may vary but usually discount two to five percent of an invoice when paid within the first ten days on a sixty or ninety day period. Should a company exceed sixty days of non payment, it could blemish their credit history and alienate them against suppliers.
Net trade credit is a way at evaluating account receivables as a source of funds vs. a use of funds....

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