Glossary
Days sales outstanding (DSO)
The average number of days a company takes to collect payment after a sale — a key measure of how fast invoices turn into cash.
The formula
A common way to calculate it:
DSO = (accounts receivable ÷ credit sales for the period) × days in the period
For example, with €300,000 in receivables and €900,000 of credit sales over a 90-day quarter, DSO is (300,000 ÷ 900,000) × 90 = 30 days.
Reading it
A lower DSO means cash comes in faster. A rising DSO is an early warning: customers are paying later, terms are being stretched, or a few large accounts are drifting. Compare it with your standard payment terms — a DSO well above them means invoices are routinely paid late.
How sales can bring it down
- Know each client's balance before visiting them.
- Raise overdue invoices early, while they're small.
- Agree payment terms as part of the sale, not after it.
Where emily fits
emily answers questions about balances and overdue invoices from your ERP, and on Cegid PHC flags overdue debt proactively. See collections and overdue invoices and proactive alerts.
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