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Debtors and creditors lists
A list of amounts owed to Creditors and amounts owing by Debtors is usually maintained especially at the end of the financial year for tax purposes. Debtors are people who owe your business money, while creditors are people to whom your business owes money to. If you have debtors or creditors, you may want to ask your tax adviser whether your business needs to keep and update lists, and when. Filing A good filing system for both accounts receivable (debtors) and accounts payable (creditors) will allow you to keep track of customers or clients who owe your business money. This means you can promptly follow up overdue accounts and will have better control over your cash flow by knowing which accounts you need to pay and when. Filing debtors and creditors invoices and records in monthly order is the preferred filing method. Unpaid Creditors should be kept separately from Paid Creditors. As the Creditor is paid the records should be removed from the Unpaid file and filed with the other Paid Creditors for the month. Businesses often create filing systems that suit their needs. One system is to file the unpaid creditors according to the due date in an indexed folder. Cheques may be made out on the due date, attached individually to the outstanding invoices with a summary list and passed on for approval and signature. These cheques will then be released depending on the Cash Flow situation. A similar technique may be used for online payment where the due invoices will be passed on for online payment. |