Debtor days

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED 2026-11-01

// THE SHORT ANSWER

Debtor days, or days sales outstanding, measure how long a business waits to be paid after invoicing. The level matters less than the direction: debtor days lengthening faster than revenue grew means customers are paying more slowly, not merely that there are more of them — and the difference decides whether a facility increase funds a growth cycle or funds a deterioration. A stable ratio can also conceal a moving composition, as ten balanced customers become three dominant ones at the same average.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.