Keeping on top of your cash flow
is critical, there are two reports which allow you to control your cash flow.
Creditors are the people to whom
we owe money for goods and services supplied by them to us on credit. Debtors
are the people who owe us money for goods or services we have supplied to them.
They are our debtors. It is quite easy to mix up the terms, and get them the
wrong way around, especially as they are “relative” terms – for example, I am a
debtor to my creditors! To learn these terms – start with credit. You buy on
credit, therefore you are a creditor, and the credit purchases that you have
yet to pay is part of your liabilities. Individuals and companies that owe you
payment are in debt to you, and are your debtors, and consequently constitute
part of your assets.
What is an Aged
Creditor Report?
This is a report which lists a
business’ suppliers and the amounts owed to them. This information should tally
with the balance sheet and let’s a business owner know the total amount owed to
suppliers as well to them individually and how old the debts are. This
information is useful for forecasting cashflow. Used in conjunction with
supplier’s statements an aged creditors report can help ensure that all invoices
have been received and accounted for correctly.
What is an Aged
Debtor Report?
This provides the same information
for a business’ customers and tells business owners how much their business is
owed in total as well as individually from them. This document is a key tool
for credit controllers who are responsible for ensuring customers pay their
invoices on time.
An aged creditor is any payments
that the company still owe over a given period of time.
An aging creditor report can be
produced; it is a list of who your business owes money to and how old the
unpaid invoices are. Other useful information can be obtained from these
reports; how much in total you owe suppliers, how old is the debt you owe, how
much you owe each supplier.
Ayden Kelly is a copy
editor located in the heart of Crawley, UK. As a copy editor she writes and
edits articles about Credit Control and Credit Management in UK, Payroll Service in UK, Part time management acccountant UK, VAT returns, Self assessment tax returns
UK etc. She is a leading resource about finding the best Local Accounts Department Service UK.
