Debtor administration is another name for customer administration. A debtor is a relationship from which you owe money. Your debtor has bought something from you or purchased a service and he has to pay you for that. A debtor can be a person, but also a company.
In the accounts, debtors are on the side of the assets. The assets. The money that you have to receive from debtors is of course not yet an asset, but you assume that it will come. Do you doubt whether the invoice will still be paid? Then it becomes a different story. Is the debtor not willing to pay or is he unable to pay you? No matter what the reason is; on your balance sheet, he is now a bad debtor. When it is certain that the invoice will not be paid, it has become a loss for your company.
The importance of debtor administration
It is important to keep your debtor administration up to date. Good credit management prevents you from finding out after months that you still have money from a company that may no longer even exist. Or that afterwards there is a discussion about the legality of an invoice. So spend enough time on your debtor administration or outsource it. It saves you money and saves you a lot of financial stress. In an orderly debtor administration you can see exactly who still has to pay, how long invoices are open and when you need to take action. For example, you can send reminders or reminders or call debtors. By responding on time, you prevent your debtors from forgetting you and you get your money faster.
What if the debtor does not pay?
And what if the debtor really does not pay? When you have met all delivery conditions, you are entitled to payment. If all goes well, the debtor is aware of your payment terms. He has to stick to that. If he doesn’t care about reminders and reminders, you can engage a collection agency. That costs you money, but you can pass this on to your debtor. But please note: going to a collection agency usually does not benefit the relationship with your debtor.
Debiteurenadministratie via Debitan
Debitan has developed an online debtor management system that helps you structure and shorten the order to cash cycle. With less costs and more insight. Best of both worlds! To run a healthy debtor administration, it is necessary that you always have insight into the current state of affairs. This way you immediately see who has paid and what you still have to do. You can even automate a lot. Keeping track of your debtor administration is so easy; it becomes a way of life.