Your Virtual Credit Manager

AUGUST 29, 2023

As you review your metrics, here are five signs that there may be a problem with your collection practices: DSO Is Rising: Days Sales Outstanding is the most common metric for measuring accounts receivable (AR) performance. If DSO is rising, you are falling behind. Collections is always playing a bit of catch up to sales.

DSO 130

DSO Credit and Collections Bad Debt Collection Effectiveness Index 130

Gaviti

APRIL 3, 2024

When accounting departments want a quick evaluation of the health of a business, they often look at their DSO, or days sales outstanding. Traditionally, a low DSO indicates that your company has capital available and is in good financial standing. This includes both current, past and overdue invoices.

DSO 52

DSO Days Sales Outstanding Credit and Collections Collection Effectiveness Index 52

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. If you need help with this, check out how to calculate DSO. But note that CEI is more accurate when measuring collections in shorter periods.

Collection Effectiveness Index 52

Collection Effectiveness Index Average Days Delinquent Days Sales Outstanding DSO 52