Vendor Receivable - Meaning & Definition

Published by MBA Skool Team, Last Updated: December 17, 2015

What is Vendor Receivable?

Vendor Receivables are payments to be received from vendors. These could be in the form of volume rebates, purchase discounts or over payments. Small businesses sometimes overlook the over payments made to the vendors because of not auditing the accounts.

Below are the steps which could be followed to compute what vendor receivables should be and how much they have been paid:

• Add up all the payments paid to the vendor in the entire year

• Subtract the credits due you. Vendor generally gives credits to make up for the damaged shipment, shortage. If the credits have actually been issued, subtract those from the amount paid to the vendor

• Compare the actual payments to the invoices to check if vendor has been paid more than required. Subtract overage from the amount paid

• If qualified for rebates, subtract those from the total payments made to the vendor

• Subtract the duplicate payment made, if there is any

• After subtracting credits, over payments, rebates and duplicates from the sum paid, the number shows total receivables for that particular vendor

On the other hand account (vendor) payable is the amount we woe to the vendor with regards to the goods purchase. As vendor receivables are asset, the payables are liability for the company.

For example –

X sold a product to Y on credit.

Here, company X will record a sale and an account receivable and company Y will record a purchase and an account payable.


Hence, this concludes the definition of Vendor Receivable along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

Browse the definition and meaning of more similar terms. The Management Dictionary covers over 2000 business concepts from 5 categories.

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