Glossary
What are debtor days?
Debtor days is the average number of days customers take to pay. The usual formula is trade debtors (accounts receivable) divided by revenue for the period, multiplied by the number of days in the period. A rising figure means cash is tied up in unpaid invoices for longer.
Also called: Days sales outstanding, DSO
Debtor days is a cash measure rather than a profit measure. Revenue is recognised when work is done; the cash arrives when the customer pays, and debtor days is the gap. It is read alongside creditor days, which measures the same thing for supplier payments.
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