What is days sales outstanding (dso)?
Days Sales Outstanding (DSO): The average number of days it takes you to collect an invoice.
How it works
DSO = (Accounts Receivable / Total Credit Sales) × Days. A DSO of 55 means you're financing 55 days of your customer's operations. Factoring effectively drops your DSO to 1–2 days without changing your customer's terms.
Where you will run into it
Days Sales Outstanding (DSO) comes up most often in invoice factoring conversations. See how invoice factoring works, including real cost ranges and timelines.
Days Sales Outstanding (DSO) questions
The average number of days it takes you to collect an invoice.
DSO = (Accounts Receivable / Total Credit Sales) × Days. A DSO of 55 means you're financing 55 days of your customer's operations. Factoring effectively drops your DSO to 1–2 days without changing your customer's terms.
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