16 June, 2020
Calculate your Days Sales Outstanding (DSO) with our Excel-based calculator, and get additional, actionable insights on the Best Possible Day Sales Outstanding(BPDSO). This DSO calculator is an industry-level yardstick; it also depicts how a reduction in Day Sales Outstanding leads to potential savings.
Calculate your Days Sales Outstanding (DSO) with our Excel-based calculator, and get additional, actionable insights on the Best Possible Day Sales Outstanding(BPDSO). This DSO calculator is an industry-level yardstick; it also depicts how a reduction in Day Sales Outstanding leads to potential savings.
DSO (Days Sales Outstanding) is the average number of days it takes for a company to collect its accounts receivables. This is quantified by how long it takes to convert credit sales to cash. For instance, if the DSO of a company is 45 days, it means that they are able to collect back their past dues within 45 days, approximately.
DSO can be calculated with various methods, but the simplest DSO calculation formula is:
Let’s say a business is making 40,000 in credit sales and recovering accounts receivable worth 20,000 in accounts receivable in average 45 days.
Then,
A business can measure its financial health with DSO. How fast a company can collect its receivables back indicates its impact on working capital. DSO is a critical metric because it can help you understand:
High DSO: A high DSO indicates that a business is taking more days to collect its debt.
Low DSO: A low DSO means a business is collecting its debt within its payment time and that it has promptly paying customers.
Step 1: Download the excel template
Step 2: Take 5 mins to fill out your sales data and accounts receivable information
Step 3: Benchmark your DSO with industry’s best possible DSO. Calculate the dollars you can save by reducing your DSO.
HighRadius Corporation
Westlake 4 Building (BP Campus)
200 Westlake Park Blvd.
8th floor
Houston, TX 77079
