What Is Technical Debt in Software Projects? Decisions That Bill You Later

In this guide, Talha Aslan and team look at the topic from the business owner's side, not the developer's. In other words, you will learn how to spot technical debt without reading code, what to ask when you compare vendor quotes and which clauses belong in your contract. We give no numbers or timeline promises, because every project differs. Instead, each section ends with a practical check you can use.

First, a fair point: technical debt is not always bad. Sometimes it is a deliberate choice. For example, you might ship a lean first version to test an idea quickly and accept the shortcuts that come with it. The problem starts when nobody records the debt, nobody knows about it and nobody ever pays it back.

Why does technical debt build up?

Technical debt rarely comes from one bad decision. Usually, many small pressures add up. These are the causes we see most often in the field:

• Skipping tests to hit a deadline.
• Starting to code before the requirements are clear.
• Copying and pasting the same logic into several places.
• Leaving old libraries and components without updates.
• Postponing documentation with a promise to do it later.
• Frequent changes in the team during the project.

What these causes share is that each one looks reasonable in the short term. However, each leaves a mark on the system. Moreover, the marks feed each other: untested code makes changes scary, and fear makes people postpone the fix.

Microsoft's guidance on formalizing development practices makes a useful point here. Everyone should agree on what "done" means, and that definition should include completed code, finished testing and updated documentation. According to the guide, clear definitions keep unfinished work from piling up. Unfinished work, in turn, is exactly what technical debt looks like.

What are the main types of technical debt?

Technical debt is not one thing. Each type shows different symptoms and needs a different repayment approach. The table below sums up the main types in plain business language.

All of these can exist at the same time. Still, they do not weigh the same. For example, documentation debt is annoying, but it rarely costs as much as architecture debt. That is why a repayment plan should separate the types first.

In practice, ask your team to label each known problem with one of these types. Even a rough label makes the next conversation about priorities far more concrete.

How does code debt differ from architecture debt?

Code debt is like a messy room. It slows you down and it is irritating, but a few days of tidying fix it. Architecture debt is like a house built on the wrong foundation. Tidying is not enough; sometimes you need to move walls.

For a business, the difference is practical. You pay down code debt inside daily work, in small steps. Architecture debt, on the other hand, usually needs a planned project. For instance, moving a system designed for one location to a multi branch setup takes a structural change, not a few patches.

Knowing this difference helps you judge requests from your team. When a developer says "we need a bit of cleanup," they usually mean code debt. When they say "this structure cannot carry that anymore," they mean architecture debt, and you should take that second sentence seriously.

Also, preventing architecture debt early costs far less than paying it later. So even for the first release, talk through your growth scenario with the team. A short conversation about where the business might be in a few years can shape key structural choices.

How can a business owner spot technical debt?

You do not need to read code. Technical debt shows clear symptoms on the business side. Check the list below against the last few months:

• Small change requests take longer and longer.
• Fixing one area breaks another.
• The team spends most of its time on bug fixes instead of new features.
• Release days feel tense, and rollbacks happen often.
• New developers need a long time to get productive.
• The team avoids certain areas and says "let's not touch that."
• Estimates keep missing.

If three or more of these sound familiar, your system may carry serious technical debt. That said, one item alone is not an alarm. For example, missed estimates sometimes come from unclear requirements rather than code quality.

The "let's not touch that" item matters most. It shows that the team does not understand or trust that part of the system. Over time, such areas often become the most critical parts of the business, because nobody dares to improve them.

What does technical debt cost a business?

We will not give numbers, since costs vary widely between projects. Still, you can see where the cost comes from.

First, there is speed. While a competitor ships a feature quickly, you wait longer for the same kind of change. As a result, you can miss market opportunities.

Second, there is quality. Complex, untested code lets more bugs reach customers. That increases support work and hurts your reputation.

The third cost is people. Good developers tend to leave projects where they fight fires all day. Consequently, knowledge walks out the door and the debt grows further.

Finally, there is security. Outdated components can carry known vulnerabilities. That risk matters especially for systems that hold customer data.

In short, the interest on technical debt never shows up as a separate line in the budget. Instead, it spreads quietly across many lines. For example, extra support hours, a missed campaign date or the effort of replacing a developer who left can all trace back to the same debt.

Why can a cheap quote turn out expensive?

When you compare software quotes, leaning toward the lowest price feels natural. However, if you never ask where the price gap comes from, you may pay that gap later as technical debt.

A low quote sometimes reflects a genuinely efficient team. Other times, it means invisible work such as testing, documentation, code review and security updates sits outside the scope. Nobody notices on delivery day, because the screens work. The gap shows up a few months later, with the first big change request.

Therefore, compare quotes on quality scope, not only price and timeline. Ask every vendor the questions in the next section in the same way. That way, you compare similar scopes instead of apples and oranges.

If you are deciding whether to commission a system from scratch, you can also compare this checklist with our custom software development process, where we explain how we keep quality steps inside the scope instead of treating them as extras.

Which questions should you ask when comparing quotes?

Send these questions to every vendor in writing and put the answers side by side:

1. Do you include automated tests in the scope? For which parts?
2. Does another developer review every code change?
3. Which documents will you deliver at the end of the project?
4. Who will own the source code and access credentials, and where will they live?
5. How do you keep libraries and components up to date?
6. In what way do you record the shortcuts you take on purpose?
7. How do you handle releases, and how do you roll back a bad one?
8. What does maintenance look like after delivery?

Take note of vague answers or replies like "not needed." In practice, question six reveals a lot. A team that openly records its shortcuts is managing technical debt. A team that claims it never takes shortcuts is either very mature or not telling the whole story.

Also ask about the working rhythm. A team that demos progress in short cycles catches problems early. We describe that rhythm in our guide to agile project management with Scrum and Kanban.

Which table helps you compare quotes?

Collecting the answers in one table makes the decision clearer. Adapt the template below to your own quotes:

Look at price only after you fill in the table. Then you can see which item explains the price gap. For example, if the whole difference between two quotes comes from testing and documentation, the cheaper quote may actually sell you a more expensive future.

In addition, share the filled table with the vendors. A serious team will either confirm the comparison or point out what you missed, and both outcomes help you.

How can you measure technical debt?

No single number measures technical debt. You can, however, track the trend. As a business owner, follow these business indicators instead of technical metrics:

• Do changes of similar size take longer over time?
• Does the number of bugs after each release go up?
• How much of the team's time goes into fixing bugs?
• Do rollbacks happen more often?

Ask your team for a short regular summary of these points. You can also ask for the output of the quality tools the team already uses. Microsoft's guidance recommends static code analysis and quality gates as part of continuous integration. We explain that pipeline in our article on what CI/CD is.

For a broader view of quality, the ISO/IEC 25010 product quality model offers a solid framework. It defines quality characteristics such as functional suitability, performance efficiency and compatibility, along with maintainability. In our experience, technical debt hits maintainability hardest.

How do you pay down technical debt?

The main way to pay down technical debt is refactoring. Refactoring means simplifying the internal structure of software without changing its visible behavior. Users notice no difference. Still, the team can make the next change faster and with more confidence.

There are three repayment approaches:

1. Continuous repayment: reserve part of every development cycle for cleanup.
2. Opportunistic repayment: improve an area whenever you add a feature to it.
3. Planned project: open a separate improvement project for heavy items such as architecture debt.

In the field, we usually see the healthiest results when teams combine the first two. The third approach should come in only when it is truly necessary, because big rewrites carry their own risk.

One important warning: refactoring without tests is risky. So it often makes sense to start repayment by reducing test debt first. Tests give the team a safety net, and then structural cleanup becomes much safer. Good debugging habits help too; see our guide to debugging techniques for a systematic approach.

Which debt should you pay first?

You cannot pay all debt at once. Two questions are enough to set priorities: how often does this area change, and how much does a failure here hurt the business?

This table reveals an important truth. Debt in an old area that nobody touches may charge you no interest at all. The real interest builds up in the areas you change constantly. Therefore, focusing cleanup there brings the highest return.

That said, keep vulnerable dependencies outside this table. They always come first, because the risk arrives from outside regardless of business impact. A known vulnerability in a library is not a matter for the next quarter; it belongs in the current cycle.

Which quality clauses should go into your contract?

The most effective way to prevent technical debt is to write expectations down from the start. Consider these clauses for your contract or its appendix:

• A definition of "done" in scope: code, tests and documentation arrive together.
• Automated tests for critical business flows.
• Code review for every change.
• Client ownership of the source code and all access credentials.
• Technical documentation covering setup, releases and architecture.
• A maintenance obligation for updating components.
• A shared list where the team records deliberate shortcuts.

These clauses describe business expectations, not legal wording. Work with your attorney on the legal framework of the contract; this article is not legal advice.

Writing the clauses too strictly can backfire as well. For example, demanding tests for every single line adds cost without much benefit. The better approach is to agree on the critical flows together and focus the expectations there. Then review the clauses at each major milestone, since priorities shift as the product grows.

How do you manage deliberate technical debt?

Sometimes you take on technical debt on purpose. For example, you ship a module in a lean form to make a trade show date. That is an acceptable business decision, as long as it meets three conditions.

The first condition is a record. Every shortcut belongs on a shared list, together with the reason and the planned repayment point. Both the team and the business should see that list.

The second condition is a boundary. The team should isolate the shortcut so it does not spread to the rest of the system. That way, the debt stays in one place.

The third condition is a repayment date. "We will look at it later" is not a date. Instead, pick a concrete cycle or event, such as the first development cycle after the trade show.

Without these three conditions, deliberate debt quickly turns into accidental debt. For the record itself, the issue tracker your team already uses works fine. We compare common options in our guide to project management tools for developers.

How should your team talk about technical debt?

The biggest problem with technical debt is often communication, not code. A developer says "the code is bad," and a manager hears "another delay." So both sides talk about the same problem in different languages, and nobody feels convinced.

To close that gap, translate debt into business terms. For example, instead of "this module has no tests," say "every time we touch this module, customers risk seeing a bug." Likewise, instead of "the architecture is weak," say "adding a second branch would take weeks with this structure."

Ask your team for three pieces of information in every debt conversation:

• Which business flow does the problem affect?
• What happens in the coming months if we do not pay it?
• Roughly how much effort does repayment take, and how can we split it into steps?

These answers turn a technical complaint into a business proposal you can decide on. We also suggest a short monthly debt review. In it, you go through new shortcuts, repaid items and changes in priority. The point is a shared picture, not blame.

On the other hand, building an environment where developers can honestly say "we took on debt here" is the business's job too. A team that feels it must hide debt only shows the problem once it has grown.

How do you assess technical debt in a project you inherit?

When you take over a project from another team or a freelancer, planning new work without knowing the size of the debt is risky. So we recommend a short assessment during the handover.

Follow these steps:

1. Confirm that you hold the source code, the database and every access credential.
2. Try to set up the system in a fresh environment using only the documentation; if that fails, you have documentation debt.
3. Run the existing automated tests and see how many pass.
4. List the components in use and check whether they are current and supported.
5. Mark the areas that produced the most bugs recently.
6. Find out where the business rules live in writing, or who knows them.

At the end, you have a debt map. That map tells the new team where to focus in the first weeks. It is also a precondition for honest estimates, because a feature in an indebted area always takes longer.

The most common case we see in inherited projects is a system that only runs on the previous developer's laptop. In that case, the first job is making setup and releases repeatable.

How does technical debt affect security?

Security is the least discussed but most dangerous side of technical debt. An outdated component may still carry a vulnerability that its maintainers fixed long ago. Because nobody touches that area, nobody notices the risk.

On the security side, technical debt usually shows up like this:

• Language or framework versions that no longer receive support.
• Passwords and access keys stored inside the code.
• Permission checks that exist only in the interface, with no second check on the server.
• Error logs that nobody keeps or nobody reads.

None of these items shows symptoms on delivery day. Yet after an attack or a data leak, they make up the largest share of the cost. That is why we recommend placing security debt above the priority table, always first.

Microsoft's guidance also recommends scanning dependencies continuously and adding security scans to the integration process. In other words, security should be a habit that runs with every change, not a check at the end of the project. For systems that process personal data, ask your legal counsel about your obligations.

Does AI assisted coding increase technical debt?

AI coding tools help developers handle routine work faster. However, speed cuts both ways when it comes to technical debt. Used well, these tools make writing tests and standard patterns easier. Used without oversight, they multiply code that nobody fully understands.

Microsoft's guidance takes a balanced view here. AI can take over repetitive validation tasks, but human review stays essential for correct business logic. We apply the same principle in our own work.

As a business owner, you can ask your team:

• Does AI generated code go through the same review process?
• Do you write tests for that code too?
• Who checks generated code for licensing and security issues?

If the answers are clear, AI can become a tool that reduces technical debt. If not, it becomes an accelerator that piles up debt faster. In short, the discipline around the tool decides the outcome, not the tool itself. We do not name any tool as the best; check current features on each provider's official pages.

Should you rewrite or improve step by step?

When technical debt grows large, teams often suggest starting over. That sounds tempting, because it promises a clean slate. However, a rewrite means rediscovering every small business rule the current system learned over the years.

Ask these questions before you decide:

• Are the current business rules written down, or do they live only in the code?
• Does the core technology still receive support?
• Can you improve the system area by area?
• Can the current system keep running during a rewrite?

In most cases, step by step improvement carries less risk. You build the new structure next to the old system and move features over piece by piece. That way, you always have a working system.

On the other hand, if the core technology no longer receives support or security updates, a broader renewal may be unavoidable. We recommend making that call based on an independent technical assessment, not on one person's opinion.

How does maintenance after delivery affect technical debt?

Software starts aging on the day you receive it. Libraries move on, browsers change and new vulnerabilities appear. Without a maintenance plan, debt grows even if nobody changes a single line.

We call this dependency debt, and it is the sneakiest type. Nobody writes new code, yet the system slowly becomes fragile. Then one day you want a small update and discover a chain of required upgrades behind it.

The core maintenance items are:

1. Regular updates of components and libraries.
2. Tracking security advisories.
3. Backup and restore tests.
4. Reviewing performance and error logs.

We describe a similar routine for websites in our monthly website maintenance checklist; the same logic applies to custom software.

How do you avoid technical debt when moving off spreadsheets?

Businesses that move from spreadsheets to custom software meet technical debt risk especially early. If the first release ships in a rush, the chaos of the old spreadsheet simply moves into the code.

To lower that risk, write business rules down before the move, clean the data before coding and keep the first release small. Also add testing and documentation expectations to the contract, even for the first version.

We cover the signs and steps of that decision in our guide on when to move from spreadsheets to custom software. Reading both articles together helps you act at the right time and start the right way.

In short, the cheapest moment to prevent technical debt is the first week of the project. The quality expectations you agree on that week shape maintenance costs for years.

When should you bring in outside help with technical debt?

If your team records debt, pays it down regularly and your business indicators look healthy, you usually do not need outside help. However, if change times keep growing, if the team avoids certain areas or if your only developer leaves, an independent view helps.

At Talha Aslan and team, we start such cases by reviewing the existing system, sorting the debt by type and proposing a repayment plan based on business impact. When a rewrite is not necessary, we say so plainly. If you are starting a new project, take a look at how we build bespoke business software with quality expectations inside the scope from day one.

No team can promise zero technical debt, and neither do we. What a team can promise is to keep the debt visible, measurable and on a planned repayment path.