Debtor
Also called: debtor or debtor
A debtor is a customer who has yet to pay an amount. Literally: has a debt with another company, person or institution. One or more invoices for delivered products and/or services have not yet been paid. Within accounting, accounts receivable are counted as assets. They are on the debit (left) side of the balance sheet, assuming that the outstanding amount will be paid.
In itself, it is not unusual for customers not to pay their bills right away. Between companies, thirty-day payment terms are not uncommon. Within accounting, debtors and their outstanding debts are part of accounts receivable.
As soon as payment is not made for a longer period of time, one or more reminders may be sent on the invoice, followed by a reminder if necessary. This exhorts the customer to still make payment. If the debtor then remains in default, the claim may be handed over to a bailiff or collection agency, which can then attempt to collect the amount owed by operation of law.
Good accounts receivable management aims not only to receive payments due in a timely manner, but also to retain customers by communicating in a timely and appropriate manner.
The opposite of a debtor is a creditor.
