Calculate days sales outstanding
Enter receivables, credit sales and payment terms to see DSO, what terms explain and how much is late.
Days sales outstanding
Customers take 36 days to pay against payment terms of 30 days, and bringing DSO down to the terms frees €400,000.
DSO against terms
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Show the formula
Credit sales per day = Credit sales ÷ Days in period Days sales outstanding = Receivables ÷ Credit sales per day Best possible DSO = Receivables not yet due ÷ Credit sales per day Average days delinquent = Days sales outstanding − Best possible DSO Overdue receivables = Receivables − Receivables not yet due
DSO is receivables at the end of the period divided by credit sales per day.
How DSO is calculated
Days sales outstanding (DSO) compares period-end receivables with credit sales per day. Divide receivables at the end of the period by credit sales per day to calculate it.
Compare DSO with payment terms to see how much of it is explained by the time customers have to pay. The result also shows best possible DSO, average days delinquent and the cash freed if DSO came down to the terms.
DSO questions
What is days sales outstanding?
Days sales outstanding (DSO) measures receivables at the end of a period against credit sales per day. It shows how many days of credit sales are held in receivables.
How do you calculate DSO?
Divide receivables at the end of the period by credit sales per day. Credit sales per day is credit sales for the period divided by the days in the period.
What is best possible DSO?
Best possible DSO is receivables not yet due divided by credit sales per day. It shows what DSO would be if every customer paid on the due date.
How is average days delinquent calculated?
Subtract best possible DSO from DSO. The result is average days delinquent.
How does DSO compare with payment terms?
Payment terms show the agreed time customers have to pay. The calculator compares DSO with those terms and shows the cash freed if DSO came down to them.