What is the difference between trade debtors and sundry debtors?
The difference between trade debtors and sundry debtors is trade debtors are specific debts like credit cards. Sundry debtors are a wide variety of debtors that can be from any source.
Bad debts is a sure loss, irrecoverable on a given date and is written off from the trade debtors. an over aged debtors usually turn out to be bad debtors. provision for doubtful debts is created based on estimation that the certain percentage of debtors may turn out to be doubtful debts. a percentage is worked out based on the debtor's collection period and general economic environment.
A trade creditor is usually someone who supplies you with core products. For example if you are a builder then your trade creditors supply your building materials, fuel for you truck, tools, etc. A sundry creditor is the company that supplies other items like the water cooler in the office, or the company that sold you the window blinds.
Looking after a customer, particularly a customer who places allot of business with you so that you keep and grow that business and the relationship you have with the customer (to stop them going. 1.Maximing the value of the firm.2.Optimum investment in sundry debtors.3.Conrol and cost of trade credit
SUNDRY - Miscellaneous small or infrequent customers that are not assigned individual ledger accounts but are classified as a group. SUNDRY CREDITORS - refers to companies or individuals to which money is owed. SUNDRY DEBTOR - is an entity from who amounts are due for goods sold or services rendered or in respect of contractual obligations. Also termed: debtor, trade debtor, and account receivable.