Days Sales Outstanding (DSO) Calculator

Analyze your accounts receivable efficiency

Calculate how many days on average it takes your business to collect payment after a sale. DSO is a key metric for cash flow and credit management.

DSO Calculator Examples

See how DSO is calculated in real business scenarios.

Annual DSO for a Retailer

Business

A retailer has $18,000 in accounts receivable and $120,000 in net credit sales over a year.

Accounts Receivable: 18000

Net Credit Sales: 120000

Period (days): 365 days

Currency: $18,000.00

Quarterly DSO for a Wholesaler

Quarterly

A wholesaler reports $7,500 in receivables and $45,000 in net credit sales for a 90-day quarter.

Accounts Receivable: 7500

Net Credit Sales: 45000

Period (days): 90 days

Currency: €7,500.00

Monthly DSO for a Service Company

Monthly

A service company has $2,000 in receivables and $10,000 in net credit sales for a 30-day month.

Accounts Receivable: 2000

Net Credit Sales: 10000

Period (days): 30 days

Currency: £2,000.00

Custom Period DSO for a Manufacturer

Custom

A manufacturer has $5,000 in receivables and $25,000 in net credit sales over 60 days.

Accounts Receivable: 5000

Net Credit Sales: 25000

Period (days): 60 days

Currency: $5,000.00

Other Titles
Understanding Days Sales Outstanding (DSO): A Comprehensive Guide
Master your accounts receivable with DSO insights

What is Days Sales Outstanding (DSO)?

  • Definition of DSO
  • Why DSO Matters
  • DSO in Financial Analysis
Days Sales Outstanding (DSO) is a financial metric that measures the average number of days it takes a company to collect payment after a sale. It is a key indicator of a company's accounts receivable efficiency and cash flow health.
DSO Formula
DSO = (Accounts Receivable / Net Credit Sales) × Period (days)

DSO Calculation Examples

  • If a company has $10,000 in receivables and $60,000 in net credit sales over 60 days, DSO = (10,000 / 60,000) × 60 = 10 days.
  • A lower DSO means faster collections and better cash flow.

Step-by-Step Guide to Using the DSO Calculator

  • Input Required Data
  • Review the Result
  • Interpret the DSO Value
To use the DSO calculator, enter your accounts receivable, net credit sales, and the period in days. Optionally, specify the currency for display.
How to Use
Click 'Calculate DSO' to see your result instantly. Use the reset button to clear all fields and start over.

Step-by-Step Examples

  • Input: Receivables = 5,000, Credit Sales = 25,000, Period = 60 days. Output: DSO = 12 days.
  • Try different periods (30, 90, 365) to analyze seasonal trends.

Real-World Applications of DSO

  • Cash Flow Management
  • Credit Policy Evaluation
  • Industry Benchmarking
DSO is widely used by finance teams to monitor cash flow, assess credit policies, and benchmark against industry standards.
Business Impact
A high DSO may indicate collection issues, while a low DSO suggests efficient receivables management.

Business Scenarios

  • A company with a DSO of 45 days may need to tighten its credit policy.
  • Comparing DSO across years helps track improvements in collections.

Common Misconceptions and Correct Methods

  • DSO vs. Receivables Turnover
  • Cash Sales Exclusion
  • Period Selection
DSO should only use credit sales, not total sales. Cash sales are excluded to avoid skewing the metric.
Best Practices
Always use the correct period and ensure data accuracy for meaningful DSO analysis.

Misconceptions & Tips

  • Including cash sales in net credit sales will understate DSO.
  • Using a 365-day period is standard for annual DSO.

Mathematical Derivation and Examples

  • DSO Formula Breakdown
  • Worked Example
  • Interpreting Results
The DSO formula divides accounts receivable by net credit sales, then multiplies by the period in days. This gives the average collection period.
Example Calculation
If Receivables = $8,000, Credit Sales = $48,000, Period = 90 days: DSO = (8,000 / 48,000) × 90 = 15 days.

Mathematical Examples

  • A DSO of 15 days means, on average, it takes 15 days to collect payment.
  • Compare DSO to industry averages for context.