Gaviti

JANUARY 2, 2024

Here’s the formula for Average Days Delinquent: ADD = Days Sales Outstanding (DSO) – Best Possible Days Sales Outstanding (BPDSO) Note the role of the DSO metric in this calculation. Many companies evaluate these two KPIs in tandem because it offers a broader understanding of how long it takes to convert invoices to cash.

Collection Effectiveness Index 52

Collection Effectiveness Index Average Days Delinquent DSO Days Sales Outstanding 52

Gaviti

NOVEMBER 20, 2023

By extension, most A/R invoice-to-cash management platforms and teams base their key performance indicators (KPIs) on the measurement of Days Sales Outstanding, or DSO. It’s a comparison of how much you were owed at the beginning of the period versus how much you actually collected during that same period.

Collection Effectiveness Index 52

Collection Effectiveness Index Days Sales Outstanding DSO Credit and Collections 52

Gaviti

APRIL 3, 2024

Companies who are able to get their traditional DSO within 3-4 days of the Best Possible DSO on average, however, benefit from healthy cash flows, long-term business growth and higher valuations. Have an effective process in place to deal with late receivables. Document a process for how the company will deal with outstanding invoices.

DSO 52

DSO Days Sales Outstanding Credit and Collections Collection Effectiveness Index 52