What are debtor days?

Why it creeps up without anyone noticing

Debtor days rarely jumps overnight. It drifts. A few customers pay a week later than usual, a new client turns out to be slower than the rest, and three months later the average has moved from 32 days to 48 without a single conversation about it. Because it is an average, no single overdue invoice is dramatic enough to trigger a reaction, but the cumulative effect on cash is the same as if every customer had quietly agreed to pay two weeks later.

What a rising figure costs you

For a business with £500,000 of annual revenue, moving from 40 to 50 debtor days ties up roughly an extra £13,700 in cash that used to be in your bank account and is now sitting in someone else's. That is not a rounding error. It is real, spendable cash, gone from your accounts because collection slowed down, not because trading did.

How CFO Pal helps

CFO Pal works your debtor days out from your invoice ledger every month and holds them against your earlier months, so a drift shows up as a trend rather than as a surprise at year end.

Two things make the figure worth more than a number on its own. It can be set against filed accounts from Companies House for companies of comparable size in your sector, so “is 48 days bad?” stops being a matter of opinion. And a single client who has started paying slower is named, with how much slower, rather than being averaged away inside a book-wide figure that still looks acceptable.