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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.
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.
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