Debtors are customers who have a debt with another person. This may concern persons, companies or institutions. There is an outstanding invoice for a product and/or service. A debtor is therefore someone from whom you still receive money. In legal terms, debtors are also called debtors.
Difference debtors and creditors
Many people get confused when it comes to debtors and creditors. Who is who? Well, the difference couldn’t be greater, because the debtor and crediteur are diametrically opposed in accounting terms. And if you keep your own accounts, it is important to know the difference. Because should you book an invoice under creditors or debtors? A debtor is on the left side of a balance sheet, the debit side, the creditor is on the right, the credit side.
- Meaning debitor: someone who still has to pay money
- Meaning creditor: someone who has yet to receive money.
If you have sent an invoice, you are the creditor who should receive money and your customer is the debtor who should pay you.
Your accounts receivable administration makes it clear to you which customers still have to pay you. It also allows you to see what the outstanding amount is and when it should be paid.
In order to prevent customers from paying late (and you from having to wait a long time for your money), a good debtormanagement is essential. For example, if a 14-day payment period is agreed, you cannot check whether an invoice has actually been paid after a month. The steps to be taken to ensure that an invoice is paid after all also fall under debtor management. Take action, carry on and receive money.