Free tool
DSO calculator (days sales outstanding)
Enter your accounts receivable, the revenue for the same period and the number of days in it. The calculator shows days sales outstanding (DSO): how many days of sales are still waiting to be collected. The formula is below the form. With JavaScript on, the figures you type stay in your browser.
Updated
Your days sales outstanding
Days sales outstanding
41.0 days
Average revenue per day 2,000.00
Rounded to one decimal.
How it is calculated
DSO = accounts receivable / revenue for the period x days in the period average revenue per day = revenue for the period / days in the period
Worked example, with illustrative figures. A business ends a 30-day month with 82,000 of unpaid invoices, after 60,000 of revenue in the month. 60,000 / 30 = 2,000.00 of sales a day, and 82,000 / 2,000 = 41.0 days: the receivables equal about 41 days of sales.
If revenue for the period is zero, there is nothing to divide by and the calculator says so instead of showing a figure.
How to read the result
- Compare it with your payment terms. If you invoice on 30-day terms and DSO is well above 30, customers are, on average, paying after the due date.
- Watch the trend, not one reading. DSO compares a balance on one day with sales over the whole period, so one large invoice raised on the last day can move it. Calculate it the same way every month and look at the direction.
- Look behind the average. One customer far behind can hide among many who pay on time. The receivables aging shows who owes what, and for how long.
- Use the same period length each time. A month's DSO and a year's DSO use different revenue; mixing them makes the trend meaningless.
The full definition, with a worked example on a sample company's books, is on the days sales outstanding page. DSO is also the first part of the cash conversion cycle: put it into the cash conversion cycle calculator with your inventory and supplier days, and set it beside days payable outstanding, how long you take to pay your own suppliers.
Bringing DSO down
- Invoice the day the work is done, with the amount, the due date and how to pay on the invoice itself.
- Remind on a fixed schedule: a courtesy note before the due date and follow-ups after it. The past due invoice email templates cover each step.
- Start with the largest overdue balances, where each payment moves DSO the most.
- Check payments before every reminder, so nobody who has paid is chased.
Or let the reminders go out for you
Ataski's AR Cash Collector: Chases your overdue invoices and gets you paid — and never emails a customer about a bill they already settled. It matches every payment before it drafts a reminder, scales the tone to how overdue an invoice is, and waits for your approval before anything is sent, by default.
Questions
How is DSO calculated?
DSO = accounts receivable / revenue for the period x days in the period. With 82,000 of receivables after a 30-day month of 60,000 in revenue, DSO is 82,000 / 60,000 x 30 = 41.0 days.
What is a good DSO?
There is no single good number. Compare DSO with your own payment terms and with your own previous months: a DSO close to your terms means customers pay roughly on time, and a DSO well above them means money is arriving late.
Should I use total revenue or credit sales?
Credit sales, if you can separate them: cash sales never sit in receivables, so including them makes DSO look shorter than it is. If almost everything you sell is invoiced, total revenue gives nearly the same answer.
Why did DSO rise when nobody paid late?
DSO compares a balance on one day with sales across the whole period, so timing moves it. A large invoice raised on the last day of the period sits in receivables in full, and a slower month of sales shrinks the revenue it is divided by. Check the trend over several months and the receivables aging before drawing a conclusion.
What if revenue for the period is zero?
Then DSO cannot be calculated, because it divides by revenue. The calculator shows a message instead of a figure.