Glossary
What is days sales outstanding (DSO)?
DSO is the average number of days it takes your customers to pay you.
Work it out as accounts receivable divided by credit sales, times the number of days in the period. A falling DSO means you're getting paid faster.
Example
$20,000 owed on $60,000 of sales over 90 days gives a DSO of 30 days.
In Australia
Compare your DSO with the payment terms you offer. If you give 14 days and your DSO is 40, customers are paying late.
General information only, not legal or financial advice.