Free tool
DSO calculator
This free DSO calculator works out days sales outstanding from your accounts receivable balance and credit sales for a period: DSO = (accounts receivable ÷ credit sales) × days in period. It also shows the cash tied up by every extra day and what a lower DSO would release. Estimates only.
DSO calculator
Days sales outstanding
30.0 days
Cash tied up per day of DSO
$6,000
Cash released at target DSO
$0
Estimates for orientation only. Not a LedgerBPO price or a promise. See assumptions below.
How the calculator works
DSO = (AR ÷ credit sales) × days in period. Cash per day = credit sales ÷ days in period. Cash released = (current DSO − target DSO) × cash per day, shown as zero if the target is higher than the current DSO.
Assumptions and sources
- Use credit sales, not total sales, or the DSO understates the real collection time when a share of sales is paid up front.
- Use the same period for AR and sales; a quarter (90 days) or a year (365 days) is typical.
- Public DSO benchmarks vary widely by industry; see the DSO benchmarks by industry article for sourced ranges.
What to do with your result
If DSO is above your terms plus 15 days, read the accounts receivable service page to see how a dedicated AR desk with reminder cadences and first-party calls brings it down.
Frequently asked questions
What is a good DSO?
It depends on your payment terms and industry. A common rule of thumb is DSO within 10 to 15 days of your stated terms, so net-30 terms with a DSO of 40 to 45 is healthy and 60 or more signals a collections problem. Industry benchmarks are collected in our DSO article.
Should I use total sales or credit sales?
Credit sales. Cash sales are collected immediately and would make DSO look better than it is. If you cannot separate them, use total sales and treat the result as a floor.
How often should I calculate DSO?
Monthly, on the same day each month, so the trend is comparable. A rising DSO with flat sales means invoices are aging; a falling DSO after a collections push shows the cadence is working.
How does LedgerBPO reduce DSO?
With a dedicated AR desk: invoices out on time, DunningDesk reminder cadences by aging bucket, first-party phone follow-up under your brand, dispute logging and same-day cash application, all reported weekly.
Ask an AI assistant to summarize this page
Next step
Books closed. Invoices paid. Every month.
Tell us what is going on with your books or billing. You will hear from a named person within 1 business day, with a custom quote and a plan for the first close.
- Reply from a named person within 1 business day
- No setup fee, month-to-month
- Your software, your data, no lock-in
Start with a custom quote
Get a custom quote Book a 20-minute callOr call +1-657-777-0006 during US, UK or Australian business hours.