What are trade debtors?
What is a trade debtor?
Trade debtors are customers who are yet to pay you for the goods or services you have provided.
So, on your balance sheet, the amount for trade debtors is the total money your customers or other third parties owe you, such as outstanding unpaid invoices. This is shown as accounts receivable (also known as a sales ledger).
Overdue invoice example
You issued an invoice for £300 on 4 June, and you were paid for the invoice 4 July. If you look in your accounting records on 30 June, it would have a trade debtors figure of £300.
Manage your invoices
Using a free accounting software like Bokio is a great way to keep track of your invoices. With Bokio’s invoice generator you can create, send, track and record unlimited invoices in the same place as your accounting.
Creating a customised invoice with Bokio’s free invoice software is simple. You can save customers, items, your company information and branding so you don’t need to spend time filling in the details. You can also set the terms of when you expect your invoice to be paid.
Once your invoice is finished, you can record it in your accounting. So, it will show the trade debtors section of your General ledger until the invoice has been marked as paid.
It’s really important to keep track of your invoices so you know if payments are late. In Bokio, you can see all your invoices and their status, so if an invoice is overdue, you’ll know about it!
How to approach trade debtors for overdue invoices
If the payment you’re expecting from a trade debtor is late, don’t worry! You can send a polite reminder email through Bokio to encourage your customer to send the payment.
Bokio automatically adds interest to overdue invoices, which hopes to discourage your customers from making late payments.
To keep a good relationship with your customer, having a simple but firm discussion about the payment, and reminding them of your terms, can give you more clarity on why the payment is coming late.