A sales report can look excellent while the bank account remains under pressure. This is why entrepreneurs need to monitor not just sales but also accounts receivable — how much customers owe and how quickly they are paying.
Frequently Asked Questions
What is a debtor in business?
A debtor is generally a person or organisation that owes money to the business.
Is money owed to the business the same as cash in the bank?
No — it is an amount receivable, not necessarily cash already received.
Why are unpaid invoices dangerous?
They can create cash-flow pressure and may eventually become bad debts.