When a business firm supplies the goods or provides the service to its customer on credit basis then those customers are called as sundry debtors. These customers are supposed to pay the outstanding amount on a particular date.
debit balances of these customers are shown as sundry debtors in asset side of balance sheet since they owe certain amounts to the business unit. They are also referred to as accounts receivable or trade debtors.
What is Accounts Receivables? Accounts receivables mean the dues from the customers. Accounts receivable is also known as Sundry Debtor Account of Customers Account. Almost all business firms sell their goods on credit basis. No business firm can survive if they do not have the credit facilities to their customers keeping in view the hard competitions in market. So, at a particular point of time what is to be received from the customers against the sale of goods or services, is called as accounts receivables.
The collection department must be very perfect, regular and punctual. As every body knows that if the funds are not available with the firm then it will collapse one day. It is very easy to sell the goods on credit but it is very difficult to collect the money from the customers in time.
How to follow the Sundry Debtors? For proper follow up the customer collections, one should follow the following procedures:-
- Accounts department must prepare the statement of dues on the basis of credit period of customers and submit the same to the collection department in reasonable time.
- Customer collection department should their reminders to the concerned customers.
- If no response is received from the customers then the representatives of customer collection department should meet the customers directly.
- After doing all even if the customer is not paying the money then legal action should be taken against the customer. One thing must be remembered that it is the final option. Because the legal case takes its own time to settle the matter.
Points to be remembered before giving the goods on credit:- Following points must be kept in mind before you give the goods on credit basis:-
- Seller should see its own financial condition whether they are in position to sell the material on credit or no.
- Seller should verify the financial position of purchaser whether they are sound or no.
- Seller also should see the management of the buyer.
- Credit period should be as minimum as possible.
- Proper follow should be done for collection the payment.
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