Every shop has two numbers the owner should know daily: how much is owed to them, and how much they owe. A supplier ships on credit terms, a wholesale customer takes a batch “until Friday”, a car workshop buys parts and settles once a month. While there are three or four such arrangements, people keep them in their head. Then someone “forgets” about a delivery note from a month ago — and it turns out nobody knows the exact figure.
Why a notebook and a spreadsheet stop working
The problem is not discipline, it is duplicated work. Every goods receipt and every payment exists twice: once in the real documents (delivery note, bank statement, receipt), and again in the debt spreadsheet that has to be remembered and updated. As soon as there are more than a few transactions a day, those two worlds drift apart:
- the payment was made, but the spreadsheet still shows the debt outstanding;
- a partial payment was recorded as one lump sum, and it is no longer clear which delivery it settled;
- a return to the supplier was never deducted from the balance at all;
- the supplier has their number, you have yours — and the reconciliation turns into an investigation.
The clearest sign that your debt tracking needs to change: before paying a supplier, you call that supplier to find out how much you owe them.
The principle that simplifies everything: debt is derived from documents
In an accounting system, balances with counterparties are not maintained separately — they are a consequence of the documents you create anyway:
- A goods receipt from a supplier increases what you owe them.
- A payment to the supplier (from the till or the bank account) reduces it.
- A sale to a customer on credit terms increases what the customer owes you.
- A payment from the customer reduces it. A prepayment creates an advance, which is shown separately.
- Returns in either direction adjust the balance automatically.
There is no separate “debt journal”: the system calculates the balance for each counterparty itself. At any moment you can see both the overall picture — how much is owed to you and how much you owe — and the detail for a specific supplier or customer, right down to the document the debt came from.
What this gives a shop in practice
Reconciliation with a supplier in a minute. The reconciliation statement is built from the same documents: every delivery, payment and return for the period. If your numbers differ from the supplier’s, you can see exactly which document they diverge on.
Control over customer credit terms. For wholesale buyers and regular B2B customers the outstanding balance is visible on the counterparty card. The salesperson sees the debt before shipping the next batch.
Money and debts in one picture. The balances in the till and on the accounts are what you have. Customer debts are what is coming soon. Supplier debts are what is leaving soon. Only all three numbers together show the real financial position of the shop, and purchasing plans should rest on them.
How to switch without pain
- Fix the opening balances. Reconcile with your key suppliers and customers, then enter the opening balances as of your start date.
- After that — documents only. Every receipt, sale and payment enters the system as a document. It is the same work you were doing in the notebook, just done once.
- Look at the report once a week. Counterparty balances: who to pay this week, and which debtor needs a reminder.
In QUINCEFIN payables and receivables work exactly on this principle: debts are calculated automatically from purchase, sale, payment and return documents, and the balance is visible for every counterparty. It is the same system that runs your inventory management, your cash and your profit report — so debts do not live a life of their own apart from the rest of the books. If you would like to see how this looks on your own product range and your own suppliers, book a demo.