Debtor Days: The Silent Cash Killer
If customers pay more slowly than your own bills are due, cash can feel tight even when the business is profitable.
Who This Is For
- Your invoices look healthy but collections are slow.
- You spend too much time chasing payment.
- You want a simple receivables review routine.
What To Do This Month
- Review your largest and oldest unpaid invoices.
- Identify which customers need immediate follow-up.
- Improve the payment terms for future work.
FAQ
What is a good debtor days number?
It depends on your industry and payment terms. Start by improving your own collection trend.
Should I offer discounts for early payment?
Only when the cash benefit is greater than the profit you give up.
What is the fastest improvement?
Focus first on the unpaid invoices that have the greatest effect on cash.
Should I stop work for late-paying customers?
Set clear payment and credit-control terms before deciding whether further work should continue.
What habit helps prevent slow collections?
Review receivables regularly and assign clear follow-up responsibility.