Debtor days, also called days sales outstanding (DSO), measures how quickly invoices turn into cash. A simple version: (amount currently owed to you ÷ sales over the period) × days in the period.
Rising debtor days are an early warning of cash-flow trouble. Comparing it with your payment terms shows how late clients are on average — if your terms are 30 days and debtor days are 52, you are waiting three extra weeks.
Example
£12,000 owed against £36,000 of sales in a 90-day quarter: (12,000 ÷ 36,000) × 90 = 30 debtor days.