Days Sales Outstanding (DSO)
Days Sales Outstanding (DSO) measures the average number of days between invoicing a customer and receiving payment. A DSO of 45 days means customers take about 6 weeks to pay. The faster customers pay, the more cash you have to run your business.
Formula
(Accounts Receivable / Total Credit Sales) × Number of Days
In plain English
Average number of days customers take to pay their invoices
Why Days Sales Outstanding (DSO) Matters
This metric reveals cash flow problems before they happen. If DSO is climbing, customers are paying slower and you might run out of cash even though sales look good on paper. Many profitable businesses fail because they can't collect fast enough.
Days Sales Outstanding (DSO) by Industry
Choose your industry to see specific benchmarks, examples, and improvement strategies
Days Sales Outstanding (DSO) for Cleaning Companies
How long it takes customers to pay you after you invoice them
Days Sales Outstanding (DSO) for Salons & Spas
How long it takes customers to pay you after you invoice them
Days Sales Outstanding (DSO) for Restaurants
How long it takes customers to pay you after you invoice them
Days Sales Outstanding (DSO) for HVAC Contractors
How long it takes customers to pay you after you invoice them
Days Sales Outstanding (DSO) for Marketing Agencies
How long it takes customers to pay you after you invoice them
Days Sales Outstanding (DSO) for Consulting Firms
How long it takes customers to pay you after you invoice them
Days Sales Outstanding (DSO) for Freelancers
How long it takes customers to pay you after you invoice them
Days Sales Outstanding (DSO) for Creative Agencies
How long it takes customers to pay you after you invoice them
Days Sales Outstanding (DSO) for IT Services
How long it takes customers to pay you after you invoice them
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