Days Sales Outstanding Calculator

Calculate days sales outstanding

Days sales outstanding, or DSO, measures the average number of days it takes a business to collect payment after a sale is made on credit. It is calculated by dividing accounts receivable by revenue for the period and multiplying by the number of days in that period. With eighty thousand in receivables against six hundred thousand of annual revenue, DSO is about forty-nine days. A lower DSO means customers pay faster, improving cash flow, while a higher DSO means cash is tied up in unpaid invoices.

The calculator also shows receivables turnover, how many times receivables are collected over the period.

Managing receivables

DSO is a key measure of how efficiently a company manages credit and collections. A rising DSO can signal lax credit terms, customers in difficulty, or weak collection processes, all of which strain cash flow. Comparing DSO against your payment terms shows whether customers are paying on time: a DSO well above your terms indicates a collection problem.

What counts as a healthy DSO depends on the industry and the credit terms offered. Tracking it over time and acting on upward trends helps protect working capital. All calculation happens locally in your browser.

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