What is a debtor?
Definition of a debtor
A debtor is a person who owes money to your business.
Most of your business's debtors will be customers who haven't yet paid for the work you've done for them. These debtors are also called 'trade debtors'. If your debtors haven't paid on time and you need to remind them to pay, this is called 'credit control'.
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Your business might also have other debtors, such as a rent deposit held by your landlord, or money that you've paid in advance, perhaps for a training course.
Got questions? Ask Emily!
FreeAgent's Chief Accountant Emily Coltman is available to answer your questions in the comments.