Days Sales Outstanding (DSO) Calculator
Days Sales Outstanding (DSO) Calculator
How many days do your customers take to pay you? A lower DSO means faster cash collection.
Total owed by customers
Total sales, last 12 months
For benchmark comparison
Your Days Sales Outstanding
How This Calculator Works
A lower DSO is better. If your terms are 30 days but DSO is 45, many customers are paying late.
This calculator is for educational purposes only and does not constitute financial advice. Consult a qualified accountant for guidance specific to your business.
What Is Days Sales Outstanding (DSO)?
Days sales outstanding (DSO) – known in the UK as debtor days – is the average number of days your customers take to pay you after a sale on credit. A lower number means you are collecting cash faster and tying up less working capital in unpaid invoices.
The DSO Formula
DSO = (Accounts Receivable / Revenue) × 365
For example, a business with £85,000 of trade debtors and £620,000 of annual revenue has a DSO of (85,000 / 620,000) × 365 = 50 days. On average, it waits 50 days to be paid.
What Is a Good DSO?
Compare it to your payment terms. If you invoice on 30-day terms but your DSO is 55 days, customers are paying around 25 days late on average – a clear collections issue. The lower your DSO relative to your terms, the healthier your cash flow.
How to Reduce Your DSO
Invoice promptly and accurately, chase before the due date, make it easy to pay, and consider early-payment incentives. For the full playbook, see how to reduce your DSO.
DSO and the Cash Conversion Cycle
DSO is one of the three parts of the cash conversion cycle (CCC = DIO + DSO − DPO). Cutting DSO directly shortens the time between paying for stock and getting paid.
Frequently Asked Questions
How do you calculate days sales outstanding?
Divide accounts receivable by revenue, then multiply by 365. The calculator above does it instantly.
Is DSO the same as debtor days?
Yes. “Debtor days” is the term most UK businesses use; “days sales outstanding” is the US and textbook name. They are calculated the same way.
What is a good DSO?
One close to or below your standard payment terms. If you offer 30 days, a DSO in the 30s is healthy; well above that suggests customers are paying late.