Total Debtors | |
|
| Average Debtor Collection Period = (Total Debtors x 365)/Total Annual Sales |
Average Debtor Collection Period |
|
| This is the average number of days it takes to collect payment from your debtors. |
|
Approved Debts Available for Funding | |
| Approved debts available for funding is based on your total debtors less aged debt (ie. debts greater than 90 days, in this example) and any other disapproved debts* that may be required. |
|
Potential Funding Available | |
| Approved debts available for funding multiplied by the agreed prepayment rate (ie. 90%, in this example). |
|
Available funding as a % of gross debts | |
| *Along with aged debts as outlined in this example, disapproved debts can include intercompany debts, disputed debts, contra balances
where you are selling to your suppliers and cash sales. |
