Debtors are customers who have a debt with another person. This may concern persons, companies or institutions. Your debtors are therefore customers who still have to pay your invoice. After all, they have purchased your product or service and you get money for that. In legal terms, debtors are also called debtors.
Difference debtors and creditors
Debtors and creditors are diametrically opposed in accounting. They are therefore opposites. It is important to remember the difference well. Because should you book an invoice under creditors or debtors? Debtors are on the left side of a balance sheet, the debit side.
- Meaning debitor: someone who still has to pay money
- Meaning creditor: someone who has yet to receive money.
For you personally this means that debtors are those from whom you still receive money (customers) and creditors are those to whom you still have to pay money (suppliers).
Debtor management is necessary
Failure to pay is more common than you might think. Dutch organizations collectively write off billions of dollars each year on debtors. Only one third of all invoices are actually paid within the set payment term. The reasons for late or non-payment are diverse. Sometimes it is malicious intent or has to do with financial problems. Improper administration or business disputes are also often causes.
Many companies have a separate debtor administration, which deals with debtor management. Strict debtor management is therefore of vital importance for a healthy company. 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 you take to ensure that the invoice is still paid, also fall under debtor management.
Automate debtor management
It can be a very time-consuming job to keep track of your debtor administration. Debitan has developed a fully automated online debtor management system to partially or completely unburden you. Our debtor management software helps you structure and shorten the order to cash cycle, with less costs and more insight.
Invoices, reminders and reminders are sent automatically with our software. You will also receive reminders when it is time to call your debtor. That way you almost don’t have to worry about it anymore. More information? View our different packages here or contact us without obligation.
Outsource debtor management
You can also choose to completely outsource your credit management. Your debtor administration is then not only automated, but also taken over in its entirety by our specialized debtor managers. If an invoice is not paid, they take action to ensure that the relevant invoice is paid as soon as possible. Of course this is all your way. Read more information about outsourcing your debtor management here.