Sundry debtors software

Individuals or organisations that offer their goods or services on a credit basis to their clients are thus, considered sundry creditors in the firm's books who avail such a credit facility. Sundry creditors are people from whom a person gets goods or services on a credit basis. They are also the businesses or clients to whom a business owes money because of the credit facilities availed in the goods or services in the business's furtherance. The accounting language calls such firms, clients, parties, companies etc.

In business, sundry creditors are liabilities as they owe a business an outstanding amount due to a specific transaction. This is based on the credit timeline agreed to between the business offering the services or goods and the business availing of the credit facility on the supply of such services or goods.

Most businesses use a separate accounts category called the accounts payable, or sundry creditors account to track payments from these transactions.

Sundry debtors are people to whom one offers services or goods on a credit basis and those businesses or clients from who the business is owed money because of the credit facilities availed for the furtherance of their business.

The accounting language calls such firms, clients, parties, companies as Sundry Debtors. This means a business owes them money because of credit facilities on goods and services they have availed. Also Read: What is Bookkeeping?

They will record this transaction in their accounts payable, sundry creditors ledger accounts book, or sundry creditors in the balance sheet. The balance sheet of Surabhi Enterprises drawing on their ledgers and journals may look as below:. Similarly, suppose one were to look at the books of Orion Enterprises who have availed the credit.

In that case, Surabhi Enterprises is a sundry debtor and will reflect in their sundry debtors ' ledger. Sundry debtors are an asset to the firm, and in the books of Orion Builders, the sundry debtors or assets of the company get listed on the assets side or left side of their balance sheet under sundry debtors.

It can lead to cessation of credit facilities and loss of reputation to the debtor in the business community, and one could land up in court. Thus, the management of your bills payable or accounts payable account impacts your credibility, health in terms of cash flow and business relationships. Hence, it should be managed with skill and promptly to ensure that your business does not suffer from impediments in cash flow.

Consider this example. S Enterprises buys goods on 30 days credit of Rs 1,50, from Gunjan Traders. Account payable to Gunjan Traders is is a liability to S Enterprises. Rs 1,50, Gunjan Traders is reflected in the books of S Enterprises as accounts payable and shown under sundry creditors since S Enterprises owes Gunjan Traders.

What about the balance sheet of Gunjan Traders? Whenever goods or services are availed on a credit basis from your vendors, it is important to specify after a discussion on the agreed-upon timeline for payments. The company has purchased goods on credit and payments are yet to be made to them. These are usually small scale suppliers. Just as for debtors, it is not practical to maintain separate ledger accounts for each small scale infrequent supplier.

Continuing from the same example,. The above purchase will be recorded as follows in the books of PQR since Company C is a sundry creditor. The difference between sundry debtors and sundry creditors is dependent on whether the company is the seller or the purchaser. If the company is the seller, then this results in sundry debtors and if the company is the buyer, this results in sundry creditors. It should also be noted that only infrequent small scale debtors and creditors should be recorded under sundry category; significant credit customers and suppliers should always be treated as trade debtors and trade receivables and should be accounted for separately.

References: 1. Bad debts are a monetary expense that debtors of a business are unable to pay, and it becomes uncollectible due to some reasons, therefore, becomes a loss for the firm. The information regarding these debtors who can convert in Bad Debt gets gathered by the Sundry Debtors Management process.

And on the basis of this information, the firms can decide how to escape from this loss or reduce the volume of damage. The Terms of Payment have become the most inclusive tool for businesses in avoiding losses in their dealings with other firms. Also, it makes clear about the cash and other discount options, interest applicability on late payments, cheque dishonor-related charges terms. The definite depiction of these terms on invoices, quotations, challans, and others, creates a legal binding over customers for their dues.

It gets made on their past performance and aging analysis. Further, it helps develop credit collection guidelines for use inside the organization by fixing responsibility for the particular departments and people.

After understanding sundry debtors and their management, why it is necessary, you all will want to know about its implementation. There are two approaches that businesses can use to implement a sundry debtors management process.

First is the Traditional or Manual Approach, in which companies early perform the whole process manually by appointing different employees. The second approach is using automation software that has the features of performing sundry debtors management. It will help in providing real-time information, messages templates for Follow-ups. Also, it helps in storing all contracts and related documents in one place, monitoring overdue, and providing automated reminders.

After providing you all information about sundry debtors and their management, I must guide you on selecting the different approach for its implementation. So if the businesses, whether small or large, go for the manual process, they will face difficulties in managing and providing the correct information. Also, the process will take a lot of time to complete. And in some cases, a simple graphical depiction of the complete data will not be possible. So with these all difficulties the second approach is the more suitable option.

The use of the software will make it easy and fast for the users to view the data in a much simpler manner. And for that firms, can choose different software solutions available in the market. But should not go for software that only provides for just this particular need.

TranZact is a digital transformation tool and platform for SMEs to digitize business processes right, from customer inquiry to dispatch. It helps in digitizing the core business activities, which also involves the sundry debtor management process.

It provides BI Dashboards, which tell about the position of cashflows, total balances of debtors, and other reports.

That further helps the users to make data-driven efficient decisions for their business. So firms should choose this software or any other software only if they provide for their nature and size.