The Debtors ledger is a subsection of Bookkeeping that records and manages receivables from customers. This includes, in particular, outgoing invoices, outstanding receivables, and the allocation of incoming payments.
What is Accounts receivable?
In the Bookkeeping, a debtor is referred to as a company's debtor, typically a customer against whom there is a receivable from a delivery or service.
The Accounts receivable maps these claims to the corresponding customer accounts and documents which amounts are still outstanding or have already been settled.
What is recorded in Accounts receivable?
Typical processes include in particular:
- Recording of receivables from outbound invoices
- Allocation of receivables to customer accounts
- Recording and allocation of incoming payments
- Open items documentation
- Reconciliation of accounts receivable
Connection with incoming payments
When a customer settles an outstanding claim, the corresponding incoming payment is allocated to the debtor or the open item.
The accounting treatment of such account movements is therefore also related to Bank transactions.
Debtors and Accounts payable – what is the difference?
The Accounts receivable is concerned with Trade receivables. The Accounts payable deals with it on the other hand Trade payables and other creditors.
In short: Debtors owe the company money – whereas with creditors, the company essentially owes money itself.
