The word “Sundry” does not have only one meaning rather it signifies diverse or various meanings. It means various or miscellaneous. The word “Credit” refers to the ability of a person to buy goods and services before making a payment and with a trust that in the near future, the payment pertaining to those specific goods and services will be made.
Sundry creditors meaning refer to those organizations or people who sell goods or services in small quantities to companies, businesses, or organizations on a credit basis. Any person that supplies goods or services on a credit basis will be called sundry creditors by businesses, firms, or organizations who avail of this facility.
Businesses or organizations often use accounts to track these sundry credit transactions. These accounts are often known as sundry creditor accounts or accounts payable. Usually, companies or businesses maintain a general ledger account to record these transactions. It is justified or beneficial for customers who purchase goods or services in larger volumes but vice versa, it is not recommended.
While sundry debtors refer to those people who owe money or debts to organizations or businesses. Sundry creditors act as liabilities for businesses because businesses or organisations are supposed to pay an exorbitant amount of money to these sundry creditors in future for availing of their facility. They are also known as trade creditors. Creditors are liabilities for businesses while on the other hand, debtors are assets for businesses.
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There are the following differences between sundry creditors and sundry debtors which are given below:
For maintaining sundry creditors, an efficient and effective technique is required. Sundry creditors management is a technique of managing the company or a business’s unpaid claims to third-party vendors over credit purchases. Effective sundry credit management is crucial for maintaining and handling the vast range of payments, processing plenty of invoices in a shorter duration, and timely management of cash flow.
There are many benefits or advantages of effective sundry creditor management. Some of them are given below: -
Helps in Sustaining a Proper Cash Flow
Proper or effective sundry creditor management makes cash flow easier. It makes the cash flow in an organization or a company more seamless and streamlined. It avoids the haphazard or disorganized utilization of money.
Helps in Tracking Sundry Creditor’s Dues
A company is required to record each invoice individually with all its terms and conditions to track payment, sometimes this becomes really overwhelming for a company or an organization to track a large number of payments and transactions.
Therefore, effective sundry creditor management is crucial to track down exact amounts of payments owed by the company to creditors to avoid overdue charges or penalties due to late payments.
Helps in Maintaining Cordial Relationships with Suppliers
Suppliers are the backbones and act as economic lifelines for any company, business or organization. For maintaining a cordial or friendly relationship with the suppliers, timely payment of dues is required. This can only be possible with effective and strategic management of sundry creditor dues.
Hence, we can conclude that companies or organizations can get goods or services effectively with the help of sundry creditors on a credit basis. However, effective and efficient sundry creditor management is also crucial to maintain a streamlined and seamless cash flow and to avoid penalties and late payment of credit dues.
Because sundry debtors owe money to businesses.
The total amount of money being transferred into and out of a business.
Because companies or businesses owe money to sundry creditors.