DSO-Days Sales Outstanding
The Days Sales Outstanding provides the average number of days for a company to get its invoices paid.
If your sales conditions are “30 days end of month”, your DSO should settle around 50 days (taking into account 45 days in theory where some pay early and some late).
Formula: DSO = (AR/S)*D
S = total sales/invoices (except cash delivery) for period D
D = days (for instance 90 if ‘S’ is on 90 days)
AR = client account (total receivables; implies that fluctuations on turnover induces variations of DSO)
Definitions provided under this section refer to the Belgian situation; unless specified otherwise. The texts are meant to summarize concepts in daily language and should not be considered as comprehensive or definite. We welcome suggestions for modifications or additions at firstname.lastname@example.org.