Business calculators

Days Sales Outstanding

The DSO calculator can help you take control of your finances. With it, you can calculate your debtors' days outstanding, understand your credit risk exposure, and predict cash flow shortages. By using the DSO calculator, you can make more informed decisions about when to extend credit and when to collect payments.

Understanding DSO 

What is days sales outstanding?

Days sales outstanding or DSO measures the average number of days a business takes to collect money from customers. It is sometimes also referred to as days receivables or average collection period. It is usually calculated on a monthly, quarterly, or annual basis. 

The DSO is an integral part of the cash conversion cycle (CCC), which is how long it takes a company to convert its inventory into cash via sales. Both figures give you valuable insight into a business’s operational efficiency. 

What is the DSO formula? 

The days sales outstanding formula is

DSO = (average accounts receivable / sales) * days in accounting period

The formula requires two steps in the calculation. You’ll need to find your average accounts receivable and sales for the time period you’re reviewing before you begin. And you’ll need a company’s financial statements, including the balance sheet, before you start.

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Common DSO questions

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