What Is Credit Control?

It could be argued that Credit Control should be called Debtor Control because those that owe your business money are debtors not creditors!  If you have an accounting background you already know this but persons from other backgrounds might not.

For credit control and debtor management purposes it is important to understand the following simple definitions of Debtor, Creditor, Invoice, Statement and Adjustment Note:

Debtor – A person or business who owes you money;

Creditor – A person or business to whom your business owes money;

Invoice – A piece of paper, or electronic representation, showing what has been bought, the amount due, payment date and ideally, on the reverse of the invoice (or if electronic as an appendix), a replication of your business’s terms of trade provided at the time of the customer being accepted by you as a credit customer;

Statement – A piece of paper, or electronic representation, showing all invoices issued to a customer over a given period, usually a month.  Their purpose is to enable your customer to reconcile their Payables records with your and stimulate prompt payment to you;

Adjustment Note – Formerly known as a credit note, issued when an invoice is incorrect or if there is a problem or dispute requiring change to the original invoice.

Source: Accounts Receivable Solutions (Australia) Pty Ltd