Debit days

Debit days is the average number of days from a sale happening until it is paid.

It is only measured for sales where the customer gets a credit.

Debit days is a financial measure used to evaluate a company's liquidity (cash flow). In other words, it measures the quality of a company's credit and billing efforts. First is the ability to evaluate which customers should provide credit. Second, the ability to collect cash on time.

Decision Beacon calculates receipt days as follows:

Days receivables - Days sales ourstanding (DSO) - Accounts receivable days
  • Number of days in the period: Day receivables are always calculated for a period. For example, a month, a quarter or a year. Number of days in the period is the number of days in this period.
  • Total value of credit sales: The sum of invoices issued in the period in which the payment date falls after the invoice date. These invoices represent credit sales. However, cash sales are not part of this value.

How are debtor days analyzed?

Receivables of the day is one of several initiatives that help provide a picture of a company's liquidity. Also Debt of the day and Day's inventory used for a more complete view.

To compare the value, you need to compare it with your company's credit policy. If the normal payment terms are 30 days, daily receivables should not exceed 30 days much. A certain amount of late payment can be expected.

In general, the lower the value, the more positive the effect on liquidity.

Consider the following factors to analyze the cause of a high value. This can be due to problems with debt collection or credit rating of customers:

  • When are invoices sent compared to the invoice and payment date?
  • How long after the payment date are reminders sent out?
  • Are payments written off?
  • Are the non-paying customers the same from month to month?

Monitor a list of unpaid invoices with payments from customers on a daily basis.

How are debtor days optimized?

To reduce debtor days, it basically requires customers to pay faster.

This can be done through one or more of the following actions

  • Reduce credit time. Do all customers receive the same credit without consideration? Then the credit time can probably be optimized by dividing customers into groups, which are then used to assign varying credit time.
  • Basically allocate minimal credit time. Those customers who complain can then consider whether their business is worth the longer credit period.
  • Get more control over recovery. Be sure to follow up on all invoices shortly after the payment deadline has been exceeded. Some even succeed in sending a payment reminder before the payment deadline is exceeded.
  • If you finance the credit with a loan, in some cases it may pay to offer a discount of a few percent to pay ahead of time.


  • Customer days

Further reading

  • Debit days

Powered by BetterDocs