Debtors are debtors, in the role of which individuals and legal entities or economic entities with debts can act. The activity of any enterprise is not complete without interaction with debtors and creditors. Debt arising from debtors is called receivables.
Types of debtors
Depending on the type of debt, debtors are distinguished by:
- bills received;
- equity contributions;
- advances paid;
- payment of salaries, taxes and payments to other creditors.
Each person in his life was in the role of a debtor: loans from banks or other individuals, debts for utilities - all this leads to debt.
Considering the status of a debtor in a market economy, we can say with confidence that the main debtors of the enterprise are buyers. Some debt is owed to employees. Turning the situation on the other hand, we find that the organization itself becomes a debtor in the presence of debts to the state, individuals and legal entities.
What is the difference between debtors and creditors?
When characterizing receivables or the concept of debtors, the question of the nature of creditors certainly arises. These are two strongly interconnected phenomena that have opposite meanings. If the debtor is the debtor, then the creditor is the party that requires the performance of the debt obligation. For example, when shipping unpaid goods, the buyer acts as the debtor, and the seller is the creditor.
Debtors and creditors are connected in one piece - the sum debt obligation. One side provides funds on certain conditions (or without a contract at all), and the second agrees to fulfill them. In this case, the debt for the debtor will be payable, and for the creditor - receivable. It turns out that debtors are debtors, and debt, the amount of which is due to the creditor, is receivable.
Normal and past due debt of debtors
When obligations to a legal entity (for example, a trading company) arise, the fact of receivables is recorded. It can have a short-term (less than one year) and long-term (more than one year) repayment period. Normal receivables include those liabilities that are not yet due. For example, goods were shipped to the buyer, payment for which according to the contract will be received after partial sale.
When debtors violate this obligation, that is, do not meet the deadline set for repayment, arrears arise. There are two types of past due obligations of a debtor - doubtful and hopeless.
Debtor's doubtful and hopeless debt
In cases where the receivable for the delivered goods has not been repaid on time and does not have a guarantee, pledge or other guarantee of payment of the debt, it is considered doubtful. Overdue obligations can be fulfilled using deferment or paying with the help of bills, shares or equivalent barter. 
If it is no longer possible to go to court, doubtful debt becomes hopeless. This means that repaying such a debt is no longer possible. The situation arises in the following cases:
- liquidation of a legal entity;
- bankruptcy of the debtor;
- the deadline for filing a claim if the debt has not been confirmed.
The amount of debt that is not receivable is written off to the financial result.
Accounts receivable in the financial management system
The debtor debt characterize as a component of current assets of the enterprise. Work related to debtor debt control is an important point in organizing an enterprise management system.
Economists recommend the following algorithm:
- To plan the total amount of the maximum possible debt of debtors.
- Set a credit limit for buyers.
- Monitor the formation of receivables.
- Engage employees in the active development of new scenarios and solve problems related to receivables.
Regardless of what control policy will be developed and adopted at the enterprise, it is necessary to carefully monitor the results of the financial analysis of debtors' debts.
Debt turnover ratio. debt
To analyze the amount of debt of debtors use the turnover ratio, which is calculated by the formula: Kabout = V ÷ Dzwedwhere:
In - revenue from the implementation process;
Dzwed - the average debt of debtors for the period under review.
The average value is determined as the amount of debt at the beginning and end of the period, divided by 2. To calculate the period of turnover of debt of debtors use the formula: Tobdz = TP ÷ Kaboutwhere:
TP - period under consideration in days.
The value of the debtor debt turnover period characterizes the average amount of time for deferred payments that the company provides them.
Obtained data on receivables can be distorted due to the fact that it also includes obligations on advances paid and owners' arrears in contributions to the authorized capital.
Accounts receivable
Accounts receivable - the property right of the organization, therefore, its amount is included in the composition of assets. To account for such amounts, several accounting accounts are used, the main of which are:
- 62 - to reflect the receivables of customers;
- 70, 71, 73 - to account for employee debt accountable amounts and other operations;
- 75 - to reflect the amounts owed by the founders;
- 76 - reflects settlements with debtors for other operations;
- 60 - in the case of an advance payment on account of the delivered products;
- 68, 69 - in case of overpayment of the amount of payments to the budget.
The amount indicated in the debit of the listed accounts indicates the obligations of the debtor. As soon as the debt is repaid, the accountant posts the amount entered in the credit of accounts receivable for debtors.
If payments on debtors' obligations are past due and cannot be claimed from them, the amount is charged to account debit 91.2. In cases where the debtor after the trial has paid all the sanctions imposed, the result is attributed to other income of the enterprise (account 91.1).
Creating a reserve for doubtful debts
Accounting for receivables that have become classified as doubtful or bad provides for the creation of a reserve for doubtful debts. It is worth remembering that the implementation of this action is primarily regulated by the accounting policy. You can only write off receivables from customers to the reserve. The operation reflects the posting: D 63 CT 62.
The amount is included in operating expenses, thereby reducing the profit of the enterprise in advance. At the same time, the debt itself does not disappear, but is listed on off-balance sheet account 007 for 5 years. What does the company leave a chance for debt collection in case the financial situation of the debtor changes.
When the debtor repays the debt, the amount will be written off from the reserve account in the income of the enterprise: Dt 91.1 Kt 63 (Dt 91.1 Kt 007).
Debtors are one of the counterparties in the system of market relations between buyers and customers. Paying due attention to the credit policy of the enterprise, you can avoid the formation of bad debt, which inhibits the economic development of the company.
