credit-cycle-analysis – Data & Science skill for AI agents

Debtor & Creditor Credit-Cycle Analysis

What it is: How long the business actually waits to be paid and how long it actually takes to pay, measured per party and per period.

Overview

Works out the smallest useful Debtor & Creditor Credit-Cycle Analysis setup for the business in

front of it, then builds it only when asked. The default output is a short recommendation, not a

spreadsheet. Artifacts - CSV, SQL DDL, JSON Schema, Notion mapping - are produced on request, from

one field list so they cannot drift apart.

Layer: Layer 8: Close & Analyse. Fits: Growth stage. Table code: n/a.

The SOP rule this skill is built around: analyse debtors on the average collection period,

outstanding invoices, overdue receivables and the aging of receivables; analyse creditors on the

average payment period, outstanding supplier balances, overdue payables and supplier aging; then

compare the debtor collection cycle with the creditor payment cycle. The comparison is the point.

Two cycles measured the same way can be read against each other, and the day-to-day pressure of

waiting longer than you take is invisible as a line on the balance sheet. That pressure is

measured in days here. Turning it into money is a separate calculation with its own basis,

below.

Six concepts that never stand in for each other. This table exists to keep them apart, and

most of the wrong answers come from swapping one for another:

| Concept | What it answers | Field that carries it |

|---|---|---|

| Contractual terms | What was agreed | Contractual Terms Days |

| Actual cycle | What actually happened | Actual Collection/Payment Days, Weighted Days |

| Benchmark | What to compare against | Benchmark Days, Gap vs Benchmark |

| Aging | How old the unpaid items are | bucket amounts, and Aging Bucket on the invoice/bill detail |

| Debtor-vs-creditor timing | Which side of the cycle is longer | Cycle Gap Days on the comparison record |

| Working-capital funding | What the timing difference costs in money | Estimated Working-Capital Funding, Calculation Basis |

Conflating them is the defect this module is built to prevent. Contractual terms of 30 days and

an actual collection cycle of 42 days are two facts about the same party, and the 42 is the one

that reaches the bank account. Writing the 30 into Actual Collection/Payment Days because it is

the number in the contract is a substituted value, not a measurement.

Aging lives on the invoice, not on the party. One party can hold open invoices in several

aging buckets on the same day. So the party-period record carries the bucket amounts

(Current Amount, Aging 0-30 Amount, Aging 31-60 Amount, Aging 61-90 Amount, Aging 91-180 Amount, Aging Over 180 Amount)

and the single Aging Bucket belongs to one invoice or one bill on the aging-detail record. A

party row carrying one Aging Bucket cannot describe a real aging position and is replaced by

the bucket amounts.

Neutral field names. The two movement fields are Credit Movement and Settlement, for

customers and for suppliers alike. Credit Movement is the credit-side activity that created the

balance in the period - customer invoices on the debtor side, supplier bills on the creditor

side. Settlement is what closed it - customer collections, supplier payments. A name like

Total Billed describes only the debtor side and quietly makes the creditor side unreadable.

The balance identity, and what happens when it fails.

Closing Balance = Opening Balance + Credit Movement - Settlement + Signed Adjustments

Check it on every row. If it does not hold, the difference is recorded and marked, never

repaired by editing a component. A silently balanced row is worse than an unbalanced one,

because the next period inherits it.

The cycle gap is descriptive, not a verdict.

Cycle Gap Days = Debtor Collection Days - Creditor Payment Days

Positive means customers take longer to pay than the business takes to pay suppliers. Zero means

the two measured cycles are equal. Negative means suppliers are paid later than customers are

collected. A positive gap is not automatically bad - it is often the ordinary consequence of

selling on credit to a customer base and buying on shorter terms. The module states the

difference and leaves the judgement to the business.

Working-capital funding needs a monetary basis, and the basis is always written down.

Estimated Working-Capital Funding = Cycle Gap Days x Relevant Daily Credit Movement

This is only computed when the relevant monetary basis exists, and Calculation Basis always

records how that basis was built. A plausible daily figure is:

Relevant Daily Credit Movement = Relevant annual credit movement / 365

and it is only used when the selected annual movement is appropriate for the analysis. Where the

monetary basis is missing, Estimated Working-Capital Funding is Unknown and the record says so.

Never invent a monetary impact, and never divide a period's movement by 365 without checking that

the period is the year the analysis is about.

Benchmarks are the user's, not the module's. Gap vs Benchmark is `Actual Collection/Payment

Days - Benchmark Days`. A benchmark must be supplied by the user, explicitly selected by the

user, or clearly labelled a proposed default. It is never presented as a business target, and

never as an industry figure unless the user supplied that figure.

Due dates are recorded, never derived. Days Overdue = Period End - Due Date. Where a due date

is not recorded, the aging is Unknown - a due date is never reconstructed from payment terms,

because terms are an agreement and the due date is a fact about one invoice.

Percentages, money and rounding. A percentage is stored as 97 for 97%, never 0.97, and the

convention is never mixed inside the table. Money is a bare number with no currency symbol in the

cell, and the currency itself is Unknown until the user states it. Amounts are the gross ledger

amounts as posted to the party's account, tax-inclusive; this module does not split tax out of a

balance. Use exact decimal arithmetic and the currency’s minor-unit convention (two decimal places is this template’s example, not universal). Round derived outputs for display; retain source precision and report any rounding difference rather than forcing reconciliation.

When to Use This Skill

• debtor collection analysis
• creditor payment analysis
• receivables aging and payables aging
• average collection period or average payment period
• customer payment behaviour and supplier payment behaviour
• working-capital cycle review
• converting an existing credit-cycle spreadsheet or process

Also use it when the user says "how long the business actually waits to be paid and how long it

actually takes to pay, measured per party", or describes the same process happening in a

spreadsheet, a document or someone inboxes.

Do not use it for: collections chasing, credit-control action plans, payment execution, banking

operations, employee analysis, disciplinary decisions, or legal advice. This skill designs

templates and analysis structures. It does not execute financial transactions, and it produces

empty or explicitly synthetic templates only. Do not request real customer/supplier data for this template-design workflow; data already supplied remains subject to the host’s actual processing and retention policies.

How It Works

The upstream shared execution contract is not bundled; use the explicit workflow and safety rules here and in the detailed domain workflow in [the bundled how-it-works reference](references/how-it-works.md). Keep unknown values explicit and derive every output from confirmed fields.

Measurement limits

Do not aggregate currencies without an explicit conversion policy. Store currency in the canonical dictionary (a confirmed single-currency dataset setting or per-row field across every format). Settlement-weighted completed-invoice delay excludes unpaid exposure and is not balance-based DSO/DPO. Keep the cohort, weighting, partial/unpaid treatment and period fixed. A gap multiplied by one daily movement is only a scenario proxy; it is not the cash conversion cycle (which also includes inventory), actual funding need, or interest cost. Different sales/purchase bases may require separate receivable/payable amounts instead.

Field Reference

The canonical fields and export mappings are maintained in [the bundled field-reference document](references/field-reference.md).

Select Options

See the [bundled select-options reference](references/select-options.md).

Relations

No relation fields. This table is standalone: Party Name is free text because no party master

table is created by this build, and inventing a link to a database that does not exist would give

a column that never resolves. Where the business later wants a live party link, add it once the

p

… (full content is in the download package)