Accounts Receivable Days (DSO)
Calculate Days Sales Outstanding (DSO) to measure how quickly customers pay invoices.
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How to use this calculator
Divide the current accounts receivable balance by annual revenue to get the fraction of a year represented. Multiply by 365 to convert to days. Lower DSO means faster collections.
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Enter your current accounts receivable balance from your balance sheet.
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Enter your total annual revenue and the payment terms you offer customers.
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Read your DSO, how it compares to your payment terms, and the collection assessment.
Frequently asked questions
What is a good DSO?
Ideally, DSO should be close to or below your stated payment terms. If you offer Net 30 terms, a DSO of 35–40 is reasonable. A DSO more than 50% above your terms suggests collection process issues.
How can I reduce my DSO?
Send invoices immediately upon delivery, offer early payment discounts, follow up on overdue accounts promptly, require deposits on large orders, and consider automating payment reminders.
What is AR turnover ratio?
AR turnover shows how many times in a year the full receivables balance is collected. An AR turnover of 12 means you collect the full balance every month on average. Higher is generally better.
Accounts Receivable Days (DSO) Calculator
Why DSO matters for cash flow
Every day of DSO represents money owed to your business that hasn't arrived yet. If your DSO is 60 days but your payment terms are 30, you're essentially lending customers an extra month of float — tying up working capital that could be used to pay suppliers, invest in growth, or reduce debt.
DSO benchmarks by industry
DSO varies widely by sector. Software and SaaS companies often achieve DSO of 30–45 days. Construction and government contractors frequently see 60–90+ days due to complex approval processes. Retail with immediate payment terms may be close to zero. Compare your DSO against industry peers for the most meaningful benchmark.
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Results are estimates for informational purposes only and do not constitute professional financial, medical, legal, or technical advice. Read full disclaimer →