Days Sales Outstanding (DSO) is the average number of days it takes a company to collect payment after a sale is made. It measures how efficiently your accounts receivable team converts credit sales into cash.
The DSO formula divides your total accounts receivable by total credit sales, then multiplies by the number of days in the measurement period.
A company wants to calculate its DSO for Q1 (90 days):
DSO benchmarks vary by industry, but these ranges apply to most B2B companies:
DSO directly impacts your cash flow, borrowing costs, and ability to invest in growth. A high DSO means your money is tied up in unpaid invoices instead of working for you.
Every day of DSO ties up working capital. A 10-day reduction on $5M AR frees up ~$167K in cash.
Consistent DSO makes revenue predictable. Volatile DSO creates cash flow surprises that disrupt operations.
Invoices past 90 days are 6x more likely to become uncollectible. Lower DSO means fewer write-offs.
Investors and lenders evaluate DSO to assess financial health. Lower DSO signals operational excellence.
Traditional AR teams follow up manually, if at all. AI agents start the moment an invoice is overdue and never stop until it is resolved.
AgentCollect AI agents call, email, and text debtors automatically. No manual follow-up. No forgotten invoices. No excuses.
Use our free DSO calculator to see where your AR stands and how much cash you could free up by reducing your collection time.
Open DSO CalculatorAgentCollect cuts DSO by 30–50% with AI agents that never miss a follow-up. Success-only fees.
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