Improve Cash Flow by Increasing your DSO
Submitted by Kevin Ballantyne on
Cash is critical to the survival to all businesses and increasing the speed with which cash flows in, improves your business’ overall health. Increasing the speed with which your customers pay you is one way to increase cash flow. The best measure for this is DSO (Days Sales Outstanding) which measures the number of days it takes your company to get paid for the work it does. It is calculated by taking the average Accounts Receivable (and Work in Process if your company has this), divide it by your Annual Gross Revenue (Sales) and multiply by 365 days.
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