article thumbnail

Top 10 Strategies for Reducing Days Sales Outstanding (DSO)

Your Virtual Credit Manager

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.

article thumbnail

AR Days Sales Outstanding Explained

Emagia

Introduction to AR Days Sales Outstanding The AR Days Sales Outstanding (DSO) metric measures the average days required to collect receivables. It is crucial for understanding a company’s credit and collections effectiveness.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Navigating Credit Risk Management in Banking: The Future of Decision-Making and Receivables

Collenda

The Role of ESG in Credit Risk Management As stakeholders increasingly demand accountability in corporate practices, banks are called to align their operations with ESG principles. By maintaining a clear overview of debtor-related processes, institutions can optimise their collection efforts and reduce Days Sales Outstanding (DSO).

article thumbnail

Tackling Customers that Always Pay Late

Your Virtual Credit Manager

To better deal with these customers, it is helpful to segregate them into three groups: Those who are financially strong (low credit risk) and are trying to increase their cash position through late payments. It is, therefore, incumbent that you minimize bad debt losses without overly restricting sales.

Bad Debt 130
article thumbnail

Is Your Company Ready for a Downturn in the Economy?

Credit Research Foundation

First, since we haven’t seen significant default activity in recent years, many companies have let up on their credit risk management efforts, as the value proposition wasn’t as compelling as it was during previous economic downturns.

article thumbnail

Receivables Turnover vs. Days Sales Outstanding (DSO): What’s the Difference?

Gaviti

Two critical key performance indicators (KPIs) that help your accounts receivable team optimize collections are receivables turnover and days sales outstanding (DSO). Days Sales Outstanding vs. Accounts Receivables Turnover Receivables turnover and days sales outstanding work in tandem.

article thumbnail

Are Your Collection Efforts Getting the Priority They Deserve?

Your Virtual Credit Manager

billion in annual sales was dissatisfied with the management of its Accounts Receivable (AR). Days Sales Outstanding (DSO) was at 63 days on predominantly Net 30 day terms. Do you need help assessing your customers’ credit risks?