The Vehicle Debtor Days informs you of the average number of days that your customers take to pay you for their vehicles. Typically, this usually applies to Fleet Sales.
Example:
A) Vehicle Debtors = R21,400 B) Vehicle Sales Daily Turnover* = R3,891 C) Vehicle Debtors Days =Â 5.5 days (A ÷ B)
Note: In order to calculate the Vehicle Sales Daily Turnover, you will need to take the total value of the vehicles sold on credit for one month and divide that figure by the number of days in that month to arrive at a daily sales turnover.
A) Vehicles Sold On Credit = R120,624 B) Days in Current Month = 31 C) Vehicle Sales Daily Turnover = R3,891 (A ÷ B)
Discussion:
Credit terms around the country with fleet companies vary considerably. In any event, you should ensure that you recover your money in the fastest time possible to reduce any risk and to minimise the investment.