Days Sales Outstanding (DSO)
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Category:  
Strategic

Measures the average number of days it takes for a company to collect payment after a sale.

What it Measures ?

How many days customers take to pay us.

Relevant StakeHolders 

Accounts Receivable Team, CFO

In-depth Use Case / Real-world Example

DSO is calculated by dividing accounts receivable by total credit sales, then multiplying by the number of days in the period. For example, if a company has ₹200,000 in receivables and ₹1,000,000 in credit sales over 365 days, the DSO is 73 days. A lower DSO indicates efficient collections and healthy cash flow.

KPI Definition

Business Value

Movement Direction

Sample Formula

(Accounts Receivable / Revenue) * Number of Days

Should Aim For
1
2
3
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