A debit balance is an amount owed. In a banking situation, it could mean that the account holder is overdrawn and owes the bank some money. If a vendor has a debit balance, it means our company has somehow overpaid the vendor company. In most circumstances, our company will either get a credit on our next bill or the vendor company will pay back the amount right away. Because of how t he term is used, some less experienced bookkeepers may end up thinking that more money is owed to the vendors, but this is an incorrect assumption.