Glossary

Glossary

Glossary

Days Sales Outstanding (DSO)

Days Sales Outstanding (DSO)

Definition

The average number of days it takes a company to collect payment after a sale. It is calculated by dividing accounts receivable by total credit sales, then multiplying by the number of days in the period. Lower DSO indicates efficient credit and collections processes.

The average number of days it takes a company to collect payment after a sale. It is calculated by dividing accounts receivable by total credit sales, then multiplying by the number of days in the period. Lower DSO indicates efficient credit and collections processes.

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