What is DSO
Daily sales outstanding or DSO is the number of days it takes a business on an average to get paid after it raises an invoice. To understand this better, consider a business with 100 customers. If all the 100 customers pay the invoices raised by the business in exactly 45 days every time throughout the year the DSO value for that business will be 45 days
How is DSO calculated ?
DSO is calculated by dividing the value of receivables by the average sales per day
What is a good DSO value
Usually companies have DSO values around 30 or less. This value again depends upon the industry you operate in
