Could One Day Improve Your Business Cash Flow?
- Collins Hume
- 3 days ago
- 2 min read
Discover what your debtor days are really worth
As many businesses settle into the new financial year, it's a good time to revisit one of the most overlooked drivers of cash flow: debtors.
Most business owners know what a debtor is.
Far fewer know how to correctly calculate Debtor Days or understand what improving this KPI by just one day could mean for their business.
Here's a real example:
A business improved its Debtor Days by just one day and released approximately $45,000 in additional cash.
A two-day improvement unlocked almost $90,000.
Sales didn't increase. Margins didn't improve.
The business simply gained faster access to money it had already earned.
It's a reminder that cash flow pressure isn't always caused by declining sales or rising costs. Quite often, the opportunity sits within working capital.
Debtors are just one of several working capital levers that can have a significant impact on cash availability and financial resilience.
A simple question worth asking is:
Do you know what one day of your debtors is worth in cash?
Throughout August, we'll be sharing practical insights into the key working capital levers that influence cash flow and business performance.
FREE WEBINAR | 25 AUGUST Practical Cash Flow for Business Owners
If this is an area you'd like to better understand, we'd love you to join us at our Practical Cash Flow for Business Owners webinar in August, where we'll explore practical strategies to improve cash flow without necessarily increasing sales.
Sometimes, the biggest opportunity isn't earning more – it's getting access to the cash you've already earned.
