Days Sales Outstanding

Days sales outstanding measures how many days it takes to collect receivables from customers.

Days sales outstanding, or DSO, measures how long it takes to collect cash from customer invoices.

Formula

DSO = Average accounts receivable / Credit sales x Days in period

DSO is a collection-speed metric and a key part of the cash conversion cycle. Compare by sector with DSO benchmarks by industry, then compare the full working-capital cycle with cash conversion cycle benchmarks by industry.