What is the different between the Debtors and Receivables?

Good question. Thanks for ask asking.

Debtor- is a current asset in the balance sheet. When the business sells goods on credit, it generates debtors. These debtors agree to pay you on a later date, say 30 days from the date of sale.

Bills receivable- is also a current asset in your balance sheet. It is a written evidence (promissory note) of debt, stating that the debtor owes the holder of the bill the amount stated on that bill.

The difference:

• Bills are easily transferable: instead of waiting 30 days for your cash, you can transfer the bill to a bank (process called bill discounting), who will give you cash and the bank will collect the money from the debtor on the due date.
• Bills can be endorsed: say you have creditors whom you have to pay off, but do not have cash at the moment. You can endorse (pass on) these bills receivable to your creditors in settlement if your debt.
• A debtor is a person or group of persons or an entity. A bill is a document or a note.
• A debtor becomes bills receivables when you draw a bill on him (which says you owe him Rs xx) and he accepts it.
• A bill receivable becomes a debtor when the bill is dishonoured, ie the debtor fails to pay the said amount on the due date of the bill.

Debtors is a current asset in the balance sheet. When the business has profit, the company sells goods on credit thereby creating debtors.

Bills recievables also comes under current asset in a balance sheet. Documents like promissory notes are a written proof saying that the debtor has to pay a certain amount to the holder of the promissory note.

Debtors are those people to whom we have made sales and now amount need to be received but sometime debters issue bills to use them until received money from them which is called bills receivables. Example: we sold goods to mr. a for $ 5000 on account and mr. a issue bill for $ 5000 so now until mr. a don't pay us if we need money we can use that bill to discount from bank and get money and at the time of payment now mr. a will pay to the bank and get back that bill from bank.