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Debtor days calculator
Your figures
| Sales invoiced a day | – |
| Debtor days now | – |
| Owed by customers at the target | – |
| Cash released | – |
Use sales before VAT and the amount owed before VAT, or both with VAT.
How it is worked out
- Sales a day is the year’s sales divided by 365.
- Debtor days is the amount owed divided by sales a day.
- The amount owed at the target is sales a day multiplied by the target days.
- Cash released is the amount owed today less the amount owed at the target.
Questions
What are debtor days?
The average number of days customers take to pay you, worked out from the amount they owe and your sales. The figure on your aged debtors report in Xero or QuickBooks is the amount owed.
What is a good number?
Close to your payment terms. With 30-day terms, debtor days of 45 means customers are paying two weeks late on average.
How do I bring it down?
Invoice the day the work is done, chase on a fixed day each week and stop work for customers who are well overdue. A Financial Controller does this every week, and Business Debt Recovery takes over invoices that stay unpaid.
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