Report on Average Debtor Days

Improve your cashflow by setting an Average Debtor Days KPI for your company.

Average Debtor is a really valuable Key Performance Indicator (KPI). It is a measure of how quickly you collect payments from your customers and therefore directly impact on you cashflow. You can use this KPI as a target for your people responsible for collection. Reducing your Average Debtor Days increases your available cash.

Average Debtor Days is calculated over the preceding 12 month by matching the invoice due date and it's payment date and taking the average of all paid invoices over 12 months.

Average Debtor Days is not to be confused with Days Sales Outstanding (DSO). Average Debtor Days is a calculation performed for every Customer using all invoices in the last 12 months and so it gives you the ability to see and manage each customers payment habits.

On the other hand Day Sales Outstanding is a calculation on all AR values. It is calculated as

Days Sales Outstanding = Accounts Receivable / Total Credit Sales * Number of Days

While this is a useful KPI it only takes in the whole AR Ledger and is less useful for managing individual debtors/ customers.

The Average Debtor Days is available in the AR Aged Receivables report but is hidden by default. To show this column follow these steps.

From the report favourites menu select AR Receivables

Screen_Shot_2017-04-24_at_8.41.30_am.png

From the toolbar select +/- Cols a

Screen_Shot_2017-04-24_at_8.43.45_am.png

Select the "Trailing 12 months Average days to Pay" and use the arrow key or double-click to put it in the Show column and press Done.

Screen_Shot_2017-04-24_at_8.44.08_am_1.png

The new column will appear in the report. Note a 0 result indicates that there is insufficient payment data in the preceding 12 months to calculate a result. ie. there is no payments in the last 12 months

Screen_Shot_2017-04-24_at_8.44.50_am.png

Was this article helpful?
0 out of 0 found this helpful
Have more questions? Submit a request

Comments

Please sign in to leave a comment.

Powered by Zendesk