Debtor days, how long it takes your credit customers to actually pay, is one of the most important numbers a builders merchant can track. Too high, and cash you have already earned is stuck on site. This guide explains how to calculate it, what a good figure looks like, and how to bring it down.
What “debtor days” means
Debtor days (also called Days Sales Outstanding, or DSO) measures the average number of days between invoicing a customer and receiving payment. It is a direct read on your working capital: every extra day of debtor days is another day your money is funding your customers’ jobs instead of your own business.
The formula is simple:
| Debtor Days (DSO) | = | (Trade debtors ÷ Credit sales) × Number of days |
|---|---|---|
| Example | = | (£420,000 ÷ £2,400,000) × 365 ≈ 64 days |
Use credit sales (not cash sales) for the truest picture, and pick a consistent period, a rolling 12 months smooths out seasonality.
What is a good debtor days figure?
For UK builders merchants selling on 30 day credit terms, the reality is that few customers pay bang on 30 days. As a working benchmark:
| Debtor days | What it usually means |
|---|---|
| Under 45 days | Strong, tight credit control on 30 day terms |
| 45, 60 days | Typical for the trade, room to improve |
| 60, 75 days | Cash is being tied up; worth a focused push |
| Over 75 days | A working capital problem, chase, review terms and limits |
Your own target depends on your terms and customer mix, but the direction of travel matters more than the absolute number: debtor days trending up is an early warning worth acting on before it becomes a cash crunch.
How to bring debtor days down
Most of the improvement comes from doing the unglamorous things consistently: invoice the same day you deliver, make statements clear and easy to pay, set and enforce credit limits, and chase overdue accounts early and politely rather than waiting until they are badly late. The merchants with the lowest debtor days are simply the most consistent at the follow up, which is exactly the work that slips when the counter is busy.
OptiFlow can automate statement runs and polite payment reminders from the data already in your ERP, so overdue accounts get chased consistently without tying up your team. See how →
Want to check your pricing is protecting margin too? Try our free margin & markup calculator. Related: what merchant software costs and AI for builders merchants.
Frequently asked questions
How do you calculate debtor days for a builders merchant?
Divide your trade debtors by your credit sales, then multiply by the number of days in the period. For example, £420,000 of debtors on £2.4m of annual credit sales is (420,000 ÷ 2,400,000) × 365 ≈ 64 days. Use credit sales rather than total sales for accuracy.
What is a good debtor days figure for a merchant?
On 30 day terms, under 45 days is strong, 45\u201360 days is typical for the trade, and over 75 days signals a working capital problem. Your ideal target depends on your terms and customer mix, but a rising trend is the real warning sign.
Why are my debtor days higher than my payment terms?
Because few trade customers pay exactly on terms, some pay late, disputes delay others, and invoicing gaps add days. A DSO of 55\u201365 on 30 day terms is common; the gap between your terms and your actual DSO is the opportunity.
How can I reduce debtor days?
Invoice the day you deliver, make statements easy to pay, enforce credit limits, and chase overdue accounts early and consistently. Automating statement runs and reminders keeps that follow up from slipping when the counter is busy, which is where most improvement comes from.