trade receivables vs customer receivables

mindiola

Senior Member
Lithuanian
Hi everyone,

what is the difference between trade receivables and customer receivables in the context of accounting? I used to think that they mean the same thing, as only those who buy something have to pay you. But recently in an annual report of a company I found those two distinguished and put into two categories.

Thank you in advance for any ideas and explanations!!!
 
  • EStjarn

    Senior Member
    Spanish
    Hello mindiola,

    Not knowing the company's name, line of business or nationality limits our ability to be of help here.

    For reference, this is from an overview of receivables at boundless.com (my bolding):
    Accounts receivable are amounts that customers owe the company for normal credit purchases. Notes receivable are amounts owed to the company by customers or others who have signed formal promissory notes in acknowledgment of their debts. Accounts receivable and notes receivable that result from company sales are called trade receivables, but there are other types of receivables as well. [For example, interest receivables, wage advances, formal loans to employees, or loans to other companies.] If significant, these nontrade receivables are usually listed in separate categories on the balance sheet because each type of nontrade receivable has distinct risk factors and liquidity characteristics.
    We can only speculate how the definitions used by the company relate to those in this overview. However, I notice that not all notes receivable can be referred to as customer receivables, according to the above.

    Also, I wonder when a company buys invoices (cf. factoring) whether they can be seen as trade receivables but not as customer receivables.
     
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