<p>The term ‘debtor' refers to an individual or company that owes money, or is in debt to an individual or organisation. An example would be a customer that has purchased a product or service from your business. In the <a href="https://www.goforma.com/small-business-accounting/what-is-balance-sheet-profit-loss" target="_blank">balance sheet</a>, debtors are listed under the current assets section.</p>
What are Debtors?
Debtors are individuals or businesses that owe money to your company for goods sold or services provided on credit. Understanding what are debtors is crucial for UK small businesses as they represent outstanding invoices and directly impact your cash flow, working capital, and financial planning for both limited companies and sole traders.
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Our small business accounting guide walks through absolutely everything you need to know if you're considering starting a limited company. From different taxes, limited company advantages/ disadvantages, how to pay yourself, and what your key filing requirements are.
- When to register a Ltd company
- When to register for VAT
- How to take money out of your company
- Dividend tax rates
- Limited company expenses & corporation tax
- Annual accounts and deadlines
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