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Days Sales Outstandingnoun · abbr.

The average number of days it takes to collect payment after a sale.

DSO measures collection speed. Rising DSO means cash is arriving later, whether from weaker credit control, disputed invoices or customers under strain.

Compare it with your stated payment terms. If terms are 30 days and DSO is 62, the problem is enforcement rather than the terms themselves.

How it is calculated

DSO = (Accounts receivable ÷ Credit sales) × Days in period

Use credit sales only — cash sales never sit in receivables.

Also called

  • debtor days
  • collection period

See it in AWRA OpsHub

Payments & Collections

Related terms

Accounts Receivable

AR

Money owed to your business by customers for sales made on credit.

Aging Report

A breakdown of receivables or payables by how overdue they are.

Cash Conversion Cycle

CCC

How many days cash is tied up between paying suppliers and collecting from customers.

Credit Limit

The maximum outstanding balance a customer may hold on credit.

More in Accounting

Accounts Payable (AP) Accrual Accounting Accrued Expense Bad Debt Provision Balance Sheet Bank Reconciliation Break-Even Point Budget Variance

Days Sales Outstanding is not just a definition here

Accounting runs on this vocabulary every day in AWRA OpsHub — 51 of our 259 glossary terms describe things the platform actually does.

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