What are debtors?
A debtor is a customer of a company who has received an invoice for a purchase but has not yet paid it. Thus, debtors are the parties from whom the company has yet to receive money. Suppose you are self-employed and you have tinkered with Mrs. Smit’s boiler. Afterwards, you then send an invoice and from this moment on Ms. Smit is your debtor because of the “debt” she has yet to pay you. The moment Mrs. Smit has paid the invoice, she is therefore also no longer a debtor, since she now no longer has a debt. The exact opposite of debtors are creditors. This is because your company’s creditors are all the parties to whom you still have to pay money. In the above example, Mrs. Smit is the debtor and you are the creditor.
When you send an invoice, you expect it to be paid within a certain amount of time. As a business, you specify a deadline between the sale of the product/service and the due date of the invoice. So the invoice must be paid before the due date. At least that is the intention. It often happens that customers pay too late or not at all. This is of course very annoying and so to prevent this, here are some tips in how to keep your debtors on their toes:
- Send invoices as soon as possible
- Provide a payment link in the invoice
- Send another friendly reminder after a time
- Call the debtor
- Send a notice of default
- Engage a debt collection agency
To make all these actions for each debtor oneone by ONEn executing a different action on each debtor is very complicated and time-consuming. To save time, money and effort for business owners, CreditDevice has developed a fully automated and all-encompassing software system for accounts receivable management. So that you as a business owner can get back to spending your time and attention on the things that really matter. Would you like to know more about our software package and the possibilities we offer? Read more under the heading products on the home page
