DSO calculator
Days sales outstanding (DSO) is the average number of days it takes you to get paid after you invoice. Enter your numbers to work out yours, see how it compares with your payment terms, and what bringing it down would free up.
How it's worked out
DSO = (accounts receivable / total credit sales) x number of days. If you invoiced $60,000 in March and customers owed you $45,000 at the end of it, DSO = ($45,000 / $60,000) x 31 = 23 days.
The verdict uses the rule of thumb from our guide: your DSO should be close to your payment terms. On Net 30, under 40 days is healthy and over 50 is worth a look.
Where to find the numbers in QuickBooks Online
A/R total: the bottom line of the A/R Aging Summary, run as of the last day of the period. Credit sales: Sales by Customer Summary for the same period. There's more on both in the DSO guide and the A/R aging report, explained.
Bringing it down
The quickest way to lower DSO is to follow up the day an invoice goes past due, not at month end. CashWatchdog checks your QuickBooks Online company every morning and emails you the invoices that just went past due.
No signup needed for this. To see what's overdue in your own QuickBooks:
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