Sundry creditors are considered as liabilities on the balance sheet of a company, as they represent the company’s outstanding obligations to pay for goods or services received. In this scenario, Supplier A, Supplier B, and Supplier C are all examples of sundry creditors for ABC Furniture Co. When a business purchases goods or services but doesn’t make an immediate payment, it incurs a liability.

1. Imagine Mr. K, a business proprietor in the printing industry, who requires a supply of printing ink.
2. The defining characteristic of sundry income is the irregularity of the revenue, not the amount generated, so there’s no limit to the amount that can qualify as sundry income.
3. This helps you to track the payment breakup against the bills created and manage your outstanding payables systematically.
4. Companies generally use an account to track the transactions related to sundry debtors, known as ‘Accounts Receivable Account’ or ‘Sundry Debtors Account’.

Let us consider an example to understand the transaction process of sundry creditors accurately. Imagine a small manufacturing company called ABC Furniture Co. that produces custom-made furniture. ABC Furniture Co. sources its raw materials, such as wood, upholstery, and hardware, from different suppliers on credit terms. The term ‘Creditor’ refers to a person or entity to that you owe money for goods or services purchased on credit.

In a balance sheet, sundry debtors are accounted for in the ‘Assets’ section, listed under the fixed assets head. This acts as an asset to the business, and in the books of the company, it is listed on the asset side of the balance sheet. It not only takes charge of your business’ timely payments but also maintains a healthy relationship with your vendors.

A high value in the sundry liabilities sundry creditor’s column is also bad for the firm offering credit and the latter could refuse to grant credit facilities to such a firm. Thus, the management of your bills payable or accounts payable account impacts your credibility, health in terms of cash flow and business relationships. Hence, it should be managed with skill and promptly to ensure that your business does not suffer from impediments in cash flow.

Who are Sundry Creditors?

Therefore, QRT Ltd. will become a debtor for Wood Ltd., whereas Wood Ltd. will become a creditor for QRT Ltd. This refers to an individual or a business that owes money or debt towards an organisation. TallyPrime is a complete business management software to manage your business easily, faster, and efficiently.

What is the difference between sundry and debtors?

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Difference Between Sundry Creditors and Sundry Debtors

Creditors, classified as liabilities, maintain a positive credit balance within the accounts. Whenever credit purchases are conducted throughout a fiscal year, they are recorded as credits in creditors’ accounts, thus contributing to an augmentation of creditors’ balance. Regularly reconcile the sundry creditors ledger with the general ledger to ensure accuracy and identify any discrepancies.

In summary, sundry creditors represent the business’s liabilities, while sundry debtors represent the business’s assets. It represents the amounts owed by a business to various creditors, including suppliers, vendors, and service providers, for goods or services that have been received on credit. Managing the sundry creditors account is crucial for businesses to maintain accurate financial records and uphold positive relationships with their creditors. In business, sundry creditors are liabilities as they owe a business an outstanding amount due to a specific transaction.

You can also get a view of the details of the outstanding payables – Opening amount, pending amount, due date and overdue days for the selected party with TallyPrime’s ledger outstanding report. All the purchases recorded bill-wise or without any bill references and the corresponding payment entries recorded are displayed in this report. You can make the payments that are pending with your parties using the report.

Detailed Description of Sundry Creditors:

Sundry debtors, also known as accounts receivable, represent the amounts owed to a company by its customers or clients for goods or services provided on credit. Sundry debtors arise when a company sells its products or services on credit terms, allowing customers to make payment at a later date. Sundry debtors are considered as assets on the balance sheet of a company, as they represent the company’s right to receive payment for goods or services provided.