The Esker Blog

JANUARY 3, 2023

A high DSO value means it takes a company a lot longer to collect and could lead to cash flow problems due to the longer time between the sale and the time the payment is received. DSO is calculated using the following formula: DSO = ( AR balance / Credit sales) x Number of days in that period.

DSO 98

DSO Accounts Receivable (AR) Credit and Collections Days Sales Outstanding 98

Gaviti

SEPTEMBER 23, 2024

Typically, accounts receivables turnover is measured as a ratio that compares your net credit sales against how many times you’ve collected receivables over a given period of time (average accounts receivable). That means that the average number of days it takes the manufacturing company to collect on its receivables is 10.5.

Days Sales Outstanding 52

Days Sales Outstanding DSO Credit and Collections Credit Sales 52

Gaviti

APRIL 3, 2024

Best Possible DSO Formula The formula for Best Possible DSO is: (Current Receivables x Number of Days in Period) ÷ Credit Sales for Period 7 Strategies to Reduce DSO Since DSO reduction is such an important element of your accounting operations, many companies turn to tools such as DSO reduction software to assist them.

DSO 52

DSO Days Sales Outstanding Credit and Collections Collection Effectiveness Index 52