Debtor days tends to fall when you invoice sooner, set due dates customers can act on, agree how you'll be paid before the work starts, and give the few customers who cause most of your delay different handling. Work it out monthly on one fixed method, because there's no official UK average to compare it with.
In this article
The short version
- Debtor days = trade debtors ÷ credit sales × days in the period; work it out monthly.
- There's no official UK average, so compare with your own terms and history.
- Invoice as soon as the job's done, with a future due date written as a date.
- Agree how you'll be paid before the work starts: a mandate, a deposit or staged invoices.
- Sort your aged debtor report by customer and handle the few persistent late payers differently.
How to work out your debtor days
Debtor days tells you how long, on average, your money spends with customers after you've invoiced them. The usual calculation is:
Debtor days = trade debtors ÷ credit sales for the period × days in the period
Say that at the end of a 30-day month you're owed £48,000, and you invoiced £60,000 during the month. Your debtor days are £48,000 ÷ £60,000 × 30 = 24 days.
Monthly is the version worth keeping. An annual figure smooths over the month that went wrong, and that's usually the month that explains the number. Calculate it at each month end from the same report, and keep your sales for the month in the next column, because a quiet month can make the figure look better without anything changing.
There's no official UK figure for small-business debtor days to aim at, so your own trend against your own payment terms is the most useful comparison. If you invoice large businesses, though, you can look up each one's reported payment performance on the government's Check Payment Practices service before you agree terms. Across all large businesses, the typical time to pay suppliers in 2025 was 32 days.
Invoice sooner, with a due date that works
Debtor days only starts counting when you send the invoice, so the gap between finishing a job and billing it doesn't show up in the measure. It still costs you. If you take ten days to send an invoice and get paid 30 days later, you've waited 40 days for your money.
Two habits close that gap: send the invoice as soon as the job's finished, or on a fixed date each customer already expects, and clear any internal sign-off quickly so invoices don't wait on approval.
The due date matters too. In Adfin's payment data on invoices paid by card, pay by bank or bank transfer, those due on the day they were issued were paid on time 60% of the time, against 76% for invoices with 8 to 14 day terms. About 5% of invoices carried a due date that had already passed on the day they were raised, often because of catch-up billing. The figures suggest a due date your customer can plan for tends to work better than one that's already gone.
A short checklist for each invoice:
- A due date in the future, written as a date rather than "net 14".
- The same terms every time for the same customer.
- A way to pay that takes seconds, such as a payment link for card, Apple Pay, Google Pay or pay by bank.
- A named person to send it to, not just an accounts inbox.
Agree how you'll be paid before the work starts
The conversation about payment is easiest while your customer is agreeing everything else. Once an invoice is overdue, it's an awkward one.
For regular work, a direct debit mandate means you collect on the due date without anyone having to remember. If your prices change, you can collect a different amount without a new mandate, provided you tell the customer in advance. For one-off jobs, a deposit before you start or staged invoices on a schedule you've both signed do the same job. Whatever you agree, put it in writing at the start, so the payment date isn't a matter of opinion later.
It also helps to put your late payment terms on every invoice. Business customers who pay late owe you statutory interest at 8% above the Bank of England base rate, which is 11.75% a year at the current 3.75% base rate, plus fixed compensation of £40 to £100 per invoice, whether or not your terms mention it. Stating it on the invoice tends to make it harder to argue with.
Focus on the customers who cause most of the delay
Your aged debtor report is more useful sorted by customer than as a total. Overdue money tends to cluster, and a short list of names is often behind most of it.
Decide in advance what happens at each stage, so an invoice reaching 30, 60 or 90 days overdue triggers a step you've already chosen. Then handle the persistent late payers differently: shorter terms, a mandate, a deposit, or no new work until the account is clear.
The rest of your customers mostly need a clear invoice and a reminder or two, sent on time. That routine part is easy to hand to software. Adfin sends invoices with a payment link, collects by card, pay by bank, bank transfer or direct debit, and matches each payment to its invoice in Xero or QuickBooks. Its AI Customer Agents send reminders from your own email domain, or by SMS or WhatsApp, at the points you've chosen, and can add statutory interest to overdue business invoices if you turn that on. You keep the calls that need a person.
If much of your income comes by direct debit, track your on-time rate alongside debtor days. Direct debit money reaches you a few working days after it's collected, so a days-based measure partly reflects bank processing time, not your customers.
Common questions
How do you calculate debtor days? Divide trade debtors by credit sales for the period and multiply by the number of days in the period. A monthly figure is more useful than an annual one.
What is a good debtor days figure for a small business? There's no official UK average. Compare your figure with your own payment terms and your own last twelve months.
What reduces debtor days fastest? Invoicing sooner and agreeing the payment method before the work starts tend to help most, because both happen before anyone is late.
Do shorter payment terms reduce debtor days? Not always. In Adfin's data, invoices due on the day they were issued were paid on time less often than those with 8 to 14 day terms.
Does direct debit reduce debtor days? It makes payment dates predictable, though the money lands a few working days after collection. If most customers pay that way, track your on-time rate too.
Can I charge interest on late invoices? On business invoices, yes: statutory interest at 8% above the Bank of England base rate, plus £40 to £100 fixed compensation per invoice.
Sources
- GOV.UK - Large businesses' payment practices and performance statistics 2025: commentary (accurate as of October 2026) https://www.gov.uk/government/statistics/large-businesses-payment-practices-and-performance-statistics-2025/large-businesses-payment-practices-and-performance-statistics-2025-commentary
- GOV.UK - Check Payment Practices (accurate as of October 2026) https://check-payment-practices.service.gov.uk/
- GOV.UK - Late commercial payments: charging interest and debt recovery (accurate as of October 2026) https://www.gov.uk/late-commercial-payments-interest-debt-recovery/charging-interest-commercial-debt
- Adfin - Credit control (accurate as of October 2026) https://www.adfin.com/credit-control
