What Is a Trade Account? (NZ Guide)
A trade account is a standing credit arrangement between a business customer and a supplier: the customer is approved to buy on account, up to a set limit, and pays on agreed terms instead of at the point of sale. Almost every NZ trade and wholesale supplier offers one, but the terms and application process are rarely explained anywhere neutral.
What a Trade Account Is
A trade account is an ongoing arrangement that lets an approved business customer purchase from a supplier on credit, rather than paying cash or card at the time of the order. Once the account is open, every purchase is invoiced against it, and the customer pays according to the supplier's agreed payment term — commonly Net 30, EOM 30, or the 20th of the month following.
A trade account is the practical, day-to-day form that trade credit takes in New Zealand. Trade credit is the concept — a supplier letting a customer pay later; a trade account is the actual account a customer applies for, is approved on, and buys against.
How It Differs From a Regular (Cash) Account
Without a trade account, a business customer typically pays for each order upfront — by card, direct debit, or cash on delivery — before or at the point of supply. With a trade account, payment is decoupled from the individual order: the customer can place several orders across a month, each one invoiced, and settle the running balance in a single payment on the due date.
- Credit limit. A trade account has a maximum balance the customer can owe at any time, set by the supplier during approval.
- Payment term. A fixed window (or calendar rule) for paying each invoice, applied consistently across every purchase on the account.
- Statement, not per-order payment. Many suppliers issue a monthly statement summarising every invoice raised, rather than expecting payment order by order.
What You Need to Open One
Requirements vary by supplier, but most NZ trade accounts are opened through a broadly similar process: a credit application (business details, NZBN, and sometimes financial information), one or more trade references from other suppliers the business already buys from, and — particularly for newer or smaller businesses — a director's personal guarantee. For the full step-by-step process, including what suppliers check before approving an account, see how a trade account application works in NZ.
Two terms come up often enough in that process that they're worth understanding on their own: a personal guarantee, which makes a director personally liable if the business can't pay, and a trade reference, a supplier vouching for how reliably the applicant pays.
Trade Accounts vs Business Instalments
A trade account and a business instalment plan both let a customer pay later, but they put the credit risk in different places. With a trade account, the supplier extends the credit and carries it until the invoice is paid. With business instalments through PaidTerms Capital, the supplier is paid the full invoice amount upfront, and PaidTerms takes on the job of collecting the customer's repayments instead. See the full comparison in trade accounts vs business instalments.
Frequently Asked Questions
Is a trade account the same as a credit card?
No. A trade account is a direct credit arrangement with one supplier, with terms that supplier sets, rather than a revolving line issued by a bank and usable anywhere.
Do all NZ suppliers offer trade accounts?
Most B2B trade and wholesale suppliers do, though smaller or newer suppliers sometimes require cash on delivery until a track record is established.
How long does it take to open a trade account?
It varies by supplier, but a straightforward application with ready trade references is often approved within a few business days.
Can a trade account be closed or suspended?
Yes. Suppliers can suspend an account if it goes over its credit limit or falls seriously overdue, and can close it altogether for repeated non-payment.
Does a trade account cost anything to open?
No, trade accounts are typically free to open. The "cost" is indirect — it's reflected in supplier pricing and in the credit risk the customer is trusted with.
Modern Trade Credit, Without the Paperwork
PaidTerms lets NZ businesses offer or use flexible payment terms without either side carrying the admin of a traditional trade account.
Read next: how a trade account application works, or trade accounts vs business instalments.
