dso statistics

DSO (Days Sales Outstanding) is a financial metric that measures the average number of days it takes for a company to collect payment after a sale has been made. It is calculated by dividing the accounts receivable balance by the total credit sales for a period and then multiplying by the number of days in that period.

DSO is an important metric for businesses as it indicates how efficiently they are collecting payments from customers. A high DSO can indicate that a company is struggling to collect payments and may be experiencing cash flow problems, while a low DSO indicates that a company is collecting payments quickly and has good cash flow.

To improve DSO, companies can implement strategies such as offering incentives for early payment, improving their credit policies and procedures, and using technology to streamline the invoicing and payment process.