Debtors Days Calculator
This calculator helps businesses determine how long it takes, on average, to collect payments from customers. By calculating debtors days, you can evaluate the efficiency of your accounts receivable and improve your cash flow management.
Calculate Average Collection Period for Credit Sales
Debtors Days (Average Collection Period) Formula
Where:
- Trade Receivables – the amount owed by customers
- Credit Sales – total sales made on credit during the year
- 365 – number of days in a year (use 360 for financial year models if needed)
This formula calculates how many days, on average, it takes to collect receivables.
Debtors Days is a key indicator of a company’s liquidity and credit control effectiveness. A lower value means faster collection and better cash flow. It’s especially useful in assessing credit policies, managing working capital, and comparing industry standards. Businesses can use this metric to refine credit terms or optimize collection processes.