Trade Payables
Short definition
Trade payables are amounts owed to suppliers for goods and services. They are short-term finance that looks interest-free; the price is tenor, discounts and supply continuity.
Detailed explanation
They are not financial debt: the facility, security and covenants attach differently. Reverse factoring is reclassified as financial debt in some packs. Advances and contract liabilities are not trade payables.
As DPO stretches, payables cut OWC. Concentration (one supplier) turns a payment delay into a stop on the line.
Why it matters for the CFO
The payments line in the cash budget is this stock. Banks read a sudden payable stretch as hidden stress.
How to read it
Trade payables / purchases = DPO/365. A rise is bargaining power or a squeeze. The IRR of a lost 2/10 net 30 discount is often above the loan rate; “stretch terms” is not automatically right.
Numerical example
Open supplier invoices 42 mn TL, rebate accruals 2 mn TL → net trade payables = 40 mn TL.
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Definitions are educational. They are not investment, credit or tax advice.