Sole Trader Debtor Days Calculator
Reviewed 7 August 2026.
Debtor days is the single most useful number a sole trader can track about getting paid, and almost nobody calculates it. It answers one question in one figure: on average, how long is it between doing the work and having the money. Everything else about collection follows from it. The cash locked up in your business at any moment is your daily revenue multiplied by your debtor days, so the number sets how much working capital you need to carry, and the gap between it and your stated terms tells you how much of that is avoidable. It is also the only measure that survives comparison over time. Individual late payers come and go, but if the trend is upward then something structural has changed, and it is usually easier to fix early. This calculator takes what you invoiced over a period and what was still owed at the end, and turns them into your collection period, the cash that ties up, and what closing the gap to your own terms would be worth.
Your collection position
What each collection speed is worth
Cash locked up and annual financing cost at different debtor days, on the same revenue.
| Debtor days | Cash locked up | Annual financing cost | Released against today |
|---|
Separate the wait you agreed to from the wait you did not
Some of your debtor days are a decision. If you offer 20 day terms then 20 days of financing is the price of trading the way you have chosen to trade, and the only way to reduce it is to change what you offer, which is a commercial conversation with consequences. The rest is different. The days beyond your terms are financing that nobody agreed to and nobody is paying for, and reducing them costs nothing but follow-up. Splitting the total into these two parts is the point of this calculator, because the two halves have completely different remedies and only one of them is free.
The improvement happens once
It is worth being clear about what better collection actually gives you. Moving from 42 days to 30 releases 12 days of revenue as a single injection of cash, and that is a one-off. After that you are running the same business with less capital tied up in it. The ongoing gain is the financing cost you stop paying, which is smaller but permanent. Both are worth having, but they are different things, and a business that spends the one-off release as though it were profit will find the gap again the following year.
What actually moves the number
In practice, the largest single component of most sole traders' debtor days is not the client at all. It is the gap between finishing work and issuing the invoice. That delay is invisible in the calculation, because the clock only starts when the invoice is dated, but it is real time during which you are funding the work. Invoicing on the day you finish rather than at the end of the month can take a week or more off the effective cycle without a single awkward conversation. After that, the next most effective changes are usually asking for a deposit on larger jobs and following up on the day payment falls due rather than a fortnight later.
Worked example
A sole trader invoices $30,000 excluding GST over a 90 day quarter, so revenue accrues at $333.33 a day. At the end of the quarter $14,000 is still owed, which gives debtor days of 42.0. Their stated terms are 20 days, so 22.0 days of that is slippage, representing $7,333.33 of cash held up longer than agreed against $6,666.67 that their own terms account for.
At a 12% cost of money the full $14,000.00 outstanding costs $1,680.00 a year to finance, of which $880.00 is the slippage. Getting to a 30 day target would release $4,000.00 of cash once and cut the ongoing financing cost.
How this is calculated
Debtor days is the amount owed divided by the amount invoiced, multiplied by the number of days in the period. Revenue per day is the amount invoiced divided by the days in the period. Cash locked up at any given number of days is revenue per day multiplied by those days, which is why the total shown always matches the amount you entered as owed. Slippage is debtor days minus your stated terms, floored at zero. Annual financing cost is the cash locked up multiplied by your cost of money. Annualised revenue scales the period figure to 365 days, so a quarterly input can be compared with an annual one.
Related NZ calculators
- Late Payment Cost Calculator for what the delay beyond your terms costs
- Payment Terms Comparison Calculator to compare the terms themselves
- Unpaid Invoice Recovery Calculator for when chasing stops being worth it
- Cash Runway Calculator for how long your buffer lasts
- Self-Employed Emergency Fund Calculator for sizing the buffer behind it