What Does Creditors Mean on Companies House?

If you have ever looked up a company’s financial statements on Companies House, you may have noticed a section on the balance sheet labelled “creditors”. For those unfamiliar with accounting terms, this can be confusing. Does it mean the company is in financial trouble? Is it the same as debt?

Understanding how creditors are reported on your balance sheet is essential for managing your company’s financial position and presenting accurate accounts to Companies House. Whether you are dealing with short-term supplier debts, tax obligations or longer-term financing, our limited company accountants can help you interpret and manage these figures with confidence. We ensure your annual accounts reflect the true health of your business, help you keep your liabilities in check, and guide you in maintaining a strong net asset position. From creditor analysis to strategic cash flow planning, we are here to support every aspect of your financial reporting.

In this article, we explain what creditors means on Companies House filings, the difference between short-term and long-term creditors, and what this figure reveals about a company’s financial position.

What Are Creditors?

In simple terms, creditors are people or organisations to whom the company owes money. This includes unpaid invoices, outstanding loans, tax liabilities and other financial obligations.

Creditors are listed as a liability on the company’s balance sheet. They represent funds that the company is required to pay in the future, which is why they reduce the company’s net assets.

Where Do Creditors Appear on Companies House?

When a company files its annual accounts, Companies House publishes them on the public register. These accounts include a balance sheet that shows the company’s financial position at its year end.

You will typically see creditors listed under one or both of the following headings:

• Creditors: amounts falling due within one year

• Creditors: amounts falling due after more than one year

These categories show the timing of the company’s repayment obligations.

What Do “Due Within One Year” and “Due After One Year” Mean?

Creditors due within one year refers to short-term liabilities that must be paid in the next twelve months. These often include:

• Trade creditors (unpaid supplier invoices)

• VAT, Corporation Tax and PAYE due to HMRC

• Short-term loans or overdrafts

• Accrued expenses such as wages or rent

Creditors due after more than one year are long-term liabilities, such as:

• Business loans with more than a year left to run

• Deferred tax

• Lease agreements or hire purchase arrangements

The split helps show how much financial pressure the company may face in the near future versus over the long term.

Do Creditors Mean the Company Is in Trouble?

Not necessarily. Having creditors is a normal part of running a business. Most companies operate on credit terms, meaning they receive goods or services and pay for them later. This creates a trade creditor balance.

However, very high creditor levels compared to assets or income could be a red flag. It might suggest that the company is struggling to manage its cash flow or is over-reliant on debt. A healthy balance sheet typically shows a manageable level of creditors alongside sufficient cash or current assets to meet short-term obligations.

Find out more about how to read accounts on Companies House.

How Do Creditors Affect Net Assets?

On the balance sheet, liabilities are subtracted from assets to calculate net assets. A high creditor balance will reduce the net asset figure.

For example:

• Total assets: £100,000

• Creditors due within one year: £30,000

• Creditors due after one year: £20,000

• Net assets: £50,000

Understanding how creditors impact net assets can help assess the financial health and solvency of a company.

Final Thoughts

On Companies House, creditors refers to the money a company owes to others, both in the short term and long term. These figures are essential for understanding a business’s financial position, especially when combined with other key metrics like debtors, cash at bank and net assets.

If you are reviewing your own company’s accounts or checking the status of a business you work with, looking at the creditors section of the balance sheet can provide valuable insight into financial obligations and cash flow management.

For smaller businesses and sole directors, the creditors section of the balance sheet can be one of the most misunderstood areas. It is not just a figure for Companies House, it is a key indicator of how your business is operating day to day. Our small company accountant service offers clear, practical advice to help you understand what your creditors figure means, how to manage payment terms, and how to stay in control of your obligations. We take the stress out of filing accounts by making sure your liabilities are reported correctly and your compliance is taken care of.

Unsure what to file, when to file it or how to stay compliant? Our Companies House Help hub walks you through it all.

You might also be interested in what does debtors mean on companies house.