Most guides to credit control metrics either list ten things to track (leaving you unsure which actually matter) or define everything in financial jargon without telling you what good looks like in practice.
This piece picks three. DSO is the one metric everyone should track. The other two tell you things DSO misses. All three can be calculated with basic invoice data, and two of them are surfaced automatically in Trove if you don’t want to do it manually.
Why three metrics, not ten
A dashboard with ten metrics is a dashboard nobody looks at. The goal isn’t comprehensive measurement - it’s knowing quickly whether your collections process is working and where to focus.
Three metrics is enough to tell that story: one that shows where you are today, one that shows where your problem clients are hiding, and one that shows whether you’re moving in the right direction.
Metric 1: Days sales outstanding (DSO)
DSO is the starting point. It tells you, on average, how long it takes to collect payment after raising an invoice. The lower your DSO, the faster you’re getting paid.
How to calculate it:
DSO = (total accounts receivable ÷ total credit sales) × number of days
Worked example: Imagine a small marketing agency, Fieldwork Creative. At the end of April, they have £48,000 in outstanding receivables. Their total invoiced revenue over the past 90 days is £120,000.
DSO = (48,000 ÷ 120,000) × 90 = 36 days
What good looks like: For a UK small business operating on 30-day payment terms, a DSO of 30-45 days is healthy. Above 60 days is a warning sign - it suggests invoices are routinely being paid late and the collections process isn’t keeping up. Above 90 days points to a more serious problem.
What DSO doesn’t tell you: DSO is an average, so it can hide what’s really going on. A business with mostly well-behaved clients and two or three very slow payers can have a perfectly acceptable DSO while carrying significant risk. That’s where the second metric comes in.
Trove surfaces DSO automatically in the dashboard - you don’t need to calculate it manually.
Metric 2: Average days delinquent (ADD)
ADD focuses specifically on the invoices that are late. Where DSO averages across everything, ADD tells you how late your late payments actually are.
How to calculate it:
ADD = DSO - best possible DSO
Best possible DSO is what your DSO would be if every customer paid exactly on their agreed payment terms (no earlier, no later). If you operate on 30-day terms, your best possible DSO is 30.
Using the Fieldwork Creative example:
- DSO = 36 days
- Best possible DSO = 30 days
- ADD = 36 - 30 = 6 days
An ADD of 6 days suggests the agency’s late payments are, on average, only marginally overdue - probably a healthy position. An ADD of 25+ days would suggest a meaningful chunk of receivables are significantly past due.
Why it matters: A business can have an acceptable DSO but a high ADD if a small number of very delinquent clients are dragging the average. ADD helps you spot those clients before they become a bad debt problem.
ADD is worth calculating manually every month or quarter - it takes about five minutes with basic invoice data.
Metric 3: % of debtors deteriorating or unchanged
This one won’t appear in most credit control guides, but it’s the most useful process metric of the three. Trove tracks it internally across our customer base.
The question it answers: is my collections process actually working?
What it measures: Of all your debtors (customers with outstanding invoices), what percentage either got worse or stayed the same compared to the previous month? A debtor “deteriorates” if they owed you more this month than last, or if a payment that was on track is now overdue. They’re “unchanged” if nothing has moved despite reminders being sent.
What good looks like: You want this number to be low and falling. If 80% of your debtors are either getting worse or not moving, your process isn’t working - you’re sending reminders but they’re not converting to payments. If the number is falling month on month, your process is working.
Why most businesses don’t track this: It requires comparing debtor positions across two time periods, which most invoicing software doesn’t do automatically. Trove tracks this natively because it’s one of the clearest signals we have that a customer’s collections process needs attention.
If your DSO looks acceptable but your % deteriorating is high, you have a segmentation problem - the right reminders aren’t going to the right people. If both are bad, the process needs a fundamental review.
How to track these
DSO - Trove surfaces this automatically. If you’re not using Trove, it’s a straightforward calculation from your aged debtor report: total receivables divided by average daily sales.
ADD - Not currently in Trove’s dashboard, but quick to calculate manually. Once a month, take your DSO figure and subtract your standard payment terms. Track it in a simple spreadsheet.
% deteriorating or unchanged - Available natively in Trove. If you’re calculating manually, pull your aged debtor report at the start of each month and compare it to the previous month. Flag any customer who owes more or whose oldest invoice has aged further.
If you want all three without the spreadsheet, Trove’s free 30-day trial connects directly to Xero and starts surfacing DSO and debtor movement from day one.
