I am a little confused about what the debtors control account is and it’s function. I seem to have lots of payments in the account but am unsure as to why they have ended up there. Any help would be much appreciated.
Debtor control account is a ledger that simply tracks any amounts owed to your company. The balance of that account at any time shows how much your customers collectively owe you.
Every time you raise an invoice the gross amount of that invoice is added to this ledger. When your customer pays the invoice it is then subsequently reduced.
You also have a creditor control account that does much the same thing but for suppliers, i.e. tracking what you owe to all your suppliers.
When you prepare a balance sheet these control accounts will reflect as an asset/liability.
Take a look at our infographic on the link below under “Working Examples”, this will show you the exact debits and credits that occur on this ledger.
1 Like
Thanks Glenn. Really helpful infographic thanks!
However, there’s loads of things in my debtors control account that have been paid - why are they still in there if they are no longer owed?
They won’t disappear as it’s a ledger so effectively things are added and deducted to increase and decrease the balance. That basically ensures that you have history and something akin to an audit trial for your debtor account.
If you scan through the debtor account you’ll see entries starting with **Payment from Client: ** this is where the debtor account is getting reduced again.