Definition: Debtor is an expression used in the accounting world to specify a party who owes money to a company or individual.
A debtor can be an entity, a company or a person of a legal nature that owes money to someone else – your business for example. If you have one or more debtors, that makes you a
creditor. To put it simply, the debtor-creditor relationship is complimentary to the customer-supplier relationship.
Different kinds of debtors
Generally speaking, a debtor is a customer who has purchased a good or service and therefore owes their supplier money in return. Therefore, on a fundamental level, almost all companies and people will be debtors at one time or another. For accounting purposes, customers/suppliers are referred to as debtors/creditors.
Debtor does not just refer to a customer of goods and services, but also to someone who has borrowed money from a bank or a lender. If you take out a loan to buy your house for example, then you as the homeowner are a debtor, while the bank who holds your mortgage is the creditor. In general, if you have borrowed money then you are a debtor to the loan agency.
Usually, each debtor has a specific agreement with their creditor (supplier/lender) about the terms of payment terms, discount offerings, etc.
Debtors in E-conomic
In the E-conomic Accounting System, you can keep track of your debtors in
the customer ledger card. The customer ledger card shows all of the entries on each debtor account for the current (not yet closed) accounting periods.
Furthermore, the aged debtor report in E-conomic lists a detailed account of which debtors owe your company money, how much they owe your company, and when they are supposed to complete payment. Learn
more about the aged debtor report on our help site E-copedia.