A creditor may be a bank, supplier or person that has provided credit to a company. In other words, a person or company owes money to its creditors. The amounts owed to creditors are reported on the company’s balance sheet as liabilities.
If a creditor required the company to sign a promissory note for the amount owed, the company will record and report the amount as Notes Payable. If a creditor is a vendor or supplier that did not require the company to sign a promissory note, the company will likely report the amounts owed as Accounts Payable. Other examples of creditors include company’s employees (who are owed wages and bonuses), governments (who are owed taxes), and customers (who made deposits or other prepayments).