Industry sector: Retail and wholesale

Architectural salvage: Payments to creditors

When you buy stock on account instead of paying cash there and then, the seller is your creditor until you pay them.

You might buy stock on a regular basis from other businesses like fellow architectural salvage dealers, antique dealers and house-clearance specialists - and some of these may offer you account facilities. If you purchase the salvage rights to a building from a builder, demolition specialist, property developer or from an organisation like the local authority then they may invoice you some time after you finish removing the salvage.

You might regularly purchase other stocks of new goods like wax polish, filler, reproduction items and so on. If you use a few regular suppliers you'll probably aim to set up an account with them

Enter in your cash flow forecast any payments that you expect to make to your creditors (including VAT) in the months in which you will pay them.

Setting up an account

To set up an account you may be asked to provide bank and trade references and until the account facility has been granted you will have to pay for your order at the time you place it or on delivery (possibly with an up-front deposit). This is known as paying on a pro forma basis.

Once your account has been set up you will normally be invoiced at monthly intervals and be expected to pay within a certain number of days of receiving the invoice.