Debtor and Creditor Schedules

What is Debtor and Creditor Schedule?

A debtor schedule lists out the expected collections from a list of debtors for given period. The debtor schedule can be used to estimate the collections for a given period of time in the future.

A creditor schedule is alike a debtor schedule but instead lists the expected payments from accounts payable for a given period of time. The creditor schedule can be used to estimate the payments for a given period of time in the future.

Steps to Creating a Debtor Schedule - Worked Example

Below, we're going to go through a worked example on how to make a Debtor Schedule.

The question we are provided are as follows:
Whitegoods Warehouse has provided the following actual and forecasted sales data. It is assumed that 60% of total sales are on credit. The credit collections are expected to be as follows, 50% in the month of sale, 30% in the month following the sale and 20% in the second month following the sale.

The expected total sales for each month are as follows.
July $125,000
August $150,000
September $130,000
October $120,000
November $160,000
December $175,000
January $130,000

Calculate the expected receipts from receivables for each month between October to December.

Step 1: Determine the Relevant Months

The first step is read through the question and identify the months (or other relevant period) that will be applicable to this question. October, November and December will be our highlighted Months. The question states that 50% of the credit sales is collected in the month of sale, 30% in the month following the sale and 20% in the second month following the sale.

From there, we need to identify which month has credit sales that are collected in either October, November or December. Lets look at some months below:
July: 50% collected in July, 30% collected in Aug, 20% collected in Sep - Not relevant
Aug: 50% collected in Aug, 30% collected in Sep - 20% collected in Oct - Relevant
Sep: 50% collected in Sep - 30% collected in Oct, 20% collected in Nov - Relevant
Oct: All months relevant
Nov: 50% collected in Nov, 30% collected in Dec - Relevant. 20% collected in Jan - non relevant.
Dec - Only 50% collected in Dec is relevant.

Step 2: Calculate the Credit Sales

Now that we have determined the relevant periods, we need to calculate the total credit sales for these months.

The relevant periods are between August - December. As an expected 60% of sales are to be on credit, the total credit sales are as follows:
August: 60% * $150,000 = $90,000
September: 60% * $130,000 = $78,000
October: 60% * $120,000 = $72,000
November: 60% * $160,000 = $96,000
December: 60% * $175,000 = $105,000

Step 3: Calculate the Collections for Each Month

Now that we have determine the total credit sales for each month and the % of the total credit sales that is collected during the relevant period, we simply multiply them together to determine the amount of credit sales from the previous sales period that is collected in the relevant period.

For example in September, there was a total of $78,000 in credit sales. In the month following the sale, $23,400 (30% * $78,000) was collected in October as it is the first month following the sale and $15,600 (20% * $78,000) is collected in November as it was the second month following the sale. We exclude the September collections as this is outside the relevant period.

Step 4: Total the collections for each month.

Lastly, we simply sum each column together to determine the total collections for each month of the relevant period.

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