Days Sales Outstanding Calculator
Days sales outstanding, and the cash locked up by collecting late. Each day of DSO above terms is a day of revenue sitting in someone else's bank account.
Also called: days sales outstanding, receivables days.
50 days to collect against terms of 30 days, so you are 20 days behind. Every day of DSO ties up $169,863.01.
How this is calculated
DSO is receivables divided by annual revenue, times 365. Comparing it to stated terms is what makes it actionable: thirty-day terms with a DSO of fifty means twenty days of revenue permanently financed by you. Multiplying that gap by daily revenue gives the cash a collections fix would release, which is usually a larger number than anyone expects and needs no external funding.
receivables as a share of annual revenue, expressed in days- AR
- Accounts receivable
Method and limits
What it assumes
- Revenue is on credit terms and spread evenly across the year.
What it deliberately does not model
- A seasonal business needs the countback method rather than a flat annual average.
- Cash sales should be excluded from the revenue figure or DSO reads low.
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Frequently asked questions
- What is a good DSO?
- Close to your stated terms. The absolute number matters less than the gap: a DSO of forty-five on forty-five day terms is fine, and one of forty on thirty day terms is not.