Any person who supplies the goods or services or consumable items to a business firm on credit basis, will be called as sundry creditor by the firm who avails this facility. The suppliers of various items relating to expenses on credit basis, are also called sundry creditors.
Sundry creditors are the liabilities of the firm because the firm is supposed to pay the outstanding amount in future as per terms and conditioned agreed upon by both the parties. They are called as trade creditors also. But at the time of preparing the final accounts, the amount payable to the creditor is shown as sundry creditors. It is shown in balance sheet in liability side because it is a liability.
What is Accounts Payable? Accounts payable means the amount to be paid against goods or services. These are called sundry creditors or sundry supplier also.
This is very important duty of the finance department to arrange money for suppliers in time because if they are not able to pay them in time then the supplies of goods be affected and it will be very difficult to meet the demand of customers also. So, one should be very careful to deal with the payment of suppliers.
Points to be remembered in respect of the payment to suppliers:- Following points must be kept in mind while dealing with the suppliers:-
- The payment of dues must be made in time as far as possible to maintain the goodwill of the firm.
- Purchase department must make sure that the goods are not purchased in more than required quantity.
- There should proper co-ordination between purchase department and finance department.
- Learn Accounting, Free Accounting Tips
- General Accounting Terms
- General Tips Relating to Indian Income Tax Act
- Free Tally Learning
- General Tips Relating to Sales Tax-VAT