16 october

Debtor

Versino Financial Suite

On Debtor is a debtor of the company, usually a customer who has purchased goods or services but has not yet paid. The claims against a debtor are called receivables.

Background

The term derives from the Latin „debere,“ which means „to owe something to someone.“ A debtor can be a natural person, a partnership, or a corporation. Each customer receives their own current account, also called a personal account. The ledger only shows the sum of all receivables. Only the current account shows how much the debt is owed to the individual business partner. The debtors ledger is the companion book: it contains sales per customer, quantities sold, due dates, customer accounts, discounts, bonuses, and balances. When a company meets its target, a receivable arises from deliveries and services. The debit period (also called customer target or Days Sales Outstanding, or DSO) shows the average payment target of customers. A higher value is not a good sign.

In SAP Business One

SAP Business One lists debtors as business partners of the type „customer“. The customer has authorization for all sales invoices. Upon creation, the business partner automatically receives a reconciliation account in the "Debtors" field. The setting originates from the "Account reconciliation" functionality, where the user can change the account in the business partner. Each invoice and each credit is automatically booked into this reconciliation account in the main ledger. It is generally not possible to book reconciliation accounts manually. The initial payment settles the debt. The due date report for customer receivables shows the open outstanding invoices in a stacked manner. The debt collection department supports the reminder of open receivables by sending reminders.

Demarcation

The counterpart to the debtor is the creditor, i.e., the lender. If a business partner is also a customer and supplier, they are called a debtor-creditor. Related entries: Creditor, Debtor-Creditor, Initial payment (SAP Business One).


 

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