Trade notes – overview

Trade notes are legally accepted forms of payment such as bank drafts, checks, promissory notes, and bills of exchange. Trade notes can be used instead of cash payments. Because trade notes are negotiable, they can also be used as a credit instrument, for example, for discounting and endorsing. Trade notes can exist on paper and on magnetic supports, according to local business practices and banking standards.

Two types of trade notes exist:

  • Trade notes payable
  • Trade notes receivable