Definition: Creditor is an accounting expression to indicate a party that has delivered a product, service or loan, and is owed money by one or more debtors.
Creditors are entities, companies or people of a legal nature who have provided goods or services, or loaned money to a debtor. On the other hand, a
debtor is the person or entity who owes money to the creditor. To simplify, the debtor-creditor relationship is similar to the customer-supplier relationship. One owes money in return for goods, services, or a loan.
Creditors in business
To speak generally, a creditor is the same as a supplier. A creditor is a person, organization or other entity, who has products or services available for sale in their business. This implies that all retailers are simultaneously creditors, because they sell products or services. For the purposes of accounting however, the term creditor is usually use only for instances where there is a longer term customer/supplier relationship than a retail sale.
Another debtor/creditor relationship that is widely understood is that made when buying a home. As the homeowner with a mortgage, you are a debtor, while the creditor is the bank who holds your mortgage. Basically, if a person or entity has loaned money to another person or entity, then they are a creditor.
Each creditor usually has a tailored agreement with their debtors about their terms of payment, discount offerings, etc.
Your creditors in e-conomic
The e-conomic Accounting Software, makes it easy for you to keep track of your creditors (aka suppliers) in
the supplier list. The supplier list is a handy function that can be used to manage your company’s creditor bookkeeping, view the accounts of your existing creditors, your booked and unbooked creditor entries, and so forth.
Also,
the aged creditor report in e-conomic provides a detailed account of which creditors you owe money to, the amount that you owe them, and when your payment should be completed. You can find out more about the aged creditor report on our help site e-copedia.