From the numbers to the change
- Your numbers sayDebtor days up from 55 to 80 over a year; one-third of debt over 90 days
- The cause underneathEasy credit given to win orders, no one owning follow-up, disputes unresolved
- What changesTerms by customer, a collections rhythm, dispute clearing, credit limits
- What to expectDebtor days back near terms, cash released
An illustration of how the thinking runs, not a client result.
The numbers to open first
Start with a receivables ageing, by customer, for the last 12 months.
| Number | How to get it | What worries us |
|---|---|---|
| Debtor days | Receivables / sales x 365 | Rising for three quarters, or above the terms you give |
| Overdue share | Overdue receivables / total receivables | More than a third overdue |
| Over 90 days | Receivables older than 90 days / total | Any growth in this bucket |
| Customer concentration | Top 5 customers' share of receivables | A few customers holding most of the overdue |
Likely causes, and how the numbers test each
| Possible cause | What you would see in the numbers |
|---|---|
| Terms loosened to win sales | Debtor days rise with sales growth; new accounts on longer terms |
| A few big customers stretching | Overdue concentrated in 3 to 5 names |
| Invoicing or documentation delay | Gap between dispatch and invoice date; disputes over paperwork |
| Open disputes | Old balances with query notes; quantities or rates disputed |
| Nobody owns follow-up | No pattern by customer; overdue everywhere, grows steadily |
What to change, in order of effect
Agree terms by customer
and put the terms on the order, not on goodwill.
Name an owner for each large overdue balance,
with a weekly review.
Clear the disputes first.
They are the oldest and least recoverable cash.
Stop supply or ask for advance
from customers who are well past terms and keep stretching.
Include collections in the sales team's targets,
so an order is not complete until the cash is in.
Business under pressure? Let a CFO read your numbers.
A senior CFO reads them with you and tells you what is really going on. No cost, no obligation.
What to expect, and when
Collections of recent overdue amounts can release cash within weeks. Older disputed balances take longer and sometimes need a negotiated settlement. Debtor days usually take two to three quarters to return near terms.
Mistakes that make it worse
- Chasing everyone equally. Start with the biggest and oldest.
- Letting sales promise terms finance cannot support.
- Using discounting or factoring as a permanent cure.
- Ignoring the MSME payment rules when your suppliers are small businesses.
Go deeper
CFOAvatar complements every turnaround
A human CFO sees your business at the review. Problems do not wait for the meeting. CFOAvatar is connected to your accounting data and checks your numbers every day, so the scoreboard in a turnaround is always current. Ask it what an owner in trouble would ask:
What owners say after the numbers started talking
They even worked with us to finetune our software (Gross Mart) so we could get micro-level details on various aspects of the business. On top of that, they streamlined our receivables follow-up process and provided valuable guidance on bank loans and valuations.
What truly sets them apart is their ability to dive into the details—cash flow, operations, and compliance—while simultaneously offering strategic insight that supports long-term decision-making. Their guidance has always been practical, thoughtful, and tailored to our specific needs rather than one-size-fits-all solutions.
Their structured MIS reports have given us clear visibility into our business performance, enabling faster and more informed decisions. The budgeting and cash flow monitoring system introduced by their team has helped us plan our funds more effectively and manage our operations with greater confidence.
Quoted word for word from our clients. Read more client words →
Questions owners ask us
What is a good debtor days figure?
It depends on your industry and the terms you offer. The test is whether debtor days are close to your stated terms and are not rising.
How do I speed up customer payments?
Agree clear terms, invoice promptly, resolve disputes, follow up on a rhythm and link sales targets to collections.
Should I charge interest on late payments?
You can agree it in contracts. Use it as leverage and a signal, but relationships matter too.