Bad Debt DSO Presentation 
Your Virtual Credit Manager
JANUARY 7, 2025
The primary way most companies measure AR performance involves looking at the Days Sales Outstanding (DSO) metric. Accelerating sales can increase DSO, but most often the cause is problems in the order-to-cash (O2C) pipeline affecting collections. Your Virtual Credit Manager is a reader-supported publication.
Your Virtual Credit Manager
FEBRUARY 25, 2025
This creates cash flow shortages, an increased risk of bad debt, and a significant work requirement to mitigate the impact of late payments. Those who are financially weak (high credit risk), in addition to essentially turning down the faucet for your cash inflow, present a higher risk of never paying for everything they owe.
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Credit Research Foundation
APRIL 12, 2024
Cash Flow – A B2B credit card program enhances cash flow through a reduction in the cycle time it takes to close a transaction, whether it be at the point of purchase or a defined payment date, by eliminating float time through the United States Postal Service.
Your Virtual Credit Manager
JUNE 25, 2024
Rising Days Sales Outstanding DSO measures the average number of days it takes to collect payment after a sale. A rising DSO indicates that your collections are not matching the rate of new sales, and if that goes on for any length of time, your cash flow will not be able to support the volume of your current business operations.
Your Virtual Credit Manager
FEBRUARY 27, 2024
Increased Bad Debt : Inadequate credit checks can result in over extending credit to high-risk customers, leading to slow payments and ultimately bad debt write-offs. Employ Shared Metrics and KPIs : Establishing common key performance indicators (KPIs) and metrics across departments fosters aligned objectives.
Your Virtual Credit Manager
JANUARY 3, 2023
The client had been forced to layoff seven of their 16 credit department employees and were desperate to find a way to keep up with collections during their peak season and meet the aggressive DSO goals upper management had set. During 1995, DSO was reduced by an additional 10 percent, and bad-debt write-offs cut in half.
Gaviti
NOVEMBER 24, 2024
That means your accounts receivable team will want to do everything in its power to increase cash flow and reduce your DSO. Ensure Buy-In From Key Stakeholders After you understand your collections team’s needs, you’ll need to present them to your CFO and any other important stakeholders to get them on board.
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