Accounting Management

What is a Creditor?

A creditor is an entity, a company or a person of a legal nature that has provided goods, services, or a monetary loan to a practice

A term used in accounting, Creditors refers to the party that has delivered a product, service or loan, and is owed money by one or more debtors. A debtor is the opposite of a creditor – it refers to the person or entity who owes money.

Once a creditor has delivered the goods/service, the payment is expected at a later date (typically agreed upon beforehand).

To put it simply, the debtor-creditor relationship is complementary to the customer-supplier relationship.

What is an order?

An order is an agreement between the Practice and the Supplier for the supply of Goods and/or Services in accordance with certain conditions.

What is a Good Received Note?

Record of goods received at the point of receipt. This record is used to confirm all goods have been received and often compared to a purchase order before payment is issued.

What is a credit note?

A receipt was given by a supplier to a practice who has returned goods, which can be offset against future purchases or payments.

What are the legal requirements of a Creditors invoice?

Invoice vs Tax Invoice What is the difference?

An invoice is a document issued by a business that is not a vendor for VAT and a Tax Invoice is a document issued by a business that is a vendor for VAT.

Tax Invoice Abridged or Full?

Where the value of the invoice is below R5000.00 you may use an abridged Tax invoice, which is less formal and only contains limited information. We however always recommend that you use the Full Tax invoice, as it is a good habit to get as much information on your client as possible when invoicing.

Creditor - The company or practice owe's the Company money for service received or product received

You have 2 different Creditors, 

Financial Creditors (Normal) and Supplier Creditors (Stock Purchases)

You can create a Creditor account or directly post to the Ledger accounts for example debit orders and you do not receive invoices or small amounts that you have to pay immediately.

A creditor will be where you have an account and can pay on a monthly or certain period 

1. Open a Creditor file (Important part is the company exclusive or inclusive where you buy from or receive service from) This will be decided on the line items on the invoice. A company can also be Exempt (The Supplier is not registered for VAT) 

2. Load an Invoice / Capture the Creditor / Supplier invoice

3. Corrections (Credit note)

4. Pay the Creditor or Supplier (Cheque - Money out)

5. Recon the Creditor or Supplier with the statement received from them every month with the payment advice on GoodX