Days Sales Outstanding Calculation
This Days Sales Outstanding (DSO) metric shows the average number of days that customers take to pay your invoices. A lower DSO means your company is able to collect payments in a short amount of time, which signifies improve cash flow and liquidity.
The value shown on the dashboard comes from the selected workbook on the preference page.
NetSuite calculates the monthly Days Sales Outstanding using the following formula:
|
Days Sales Outstanding (DSO) |
= |
Average Days Open of Fully Paid Invoices for the Month |
For example, Company B has three invoices closed on May 31st with the following details:
|
Invoice |
Transaction Date |
Date Closed |
Number of Days Open |
|---|---|---|---|
|
Invoice A |
April 25, 2024 |
May 31, 2024 |
36 |
|
Invoice B |
May 1, 2024 |
May 31, 2024 |
30 |
|
Invoice C |
May 13, 2024 |
May 31, 2024 |
18 |
The DSO is calculated for May 2024 as:
|
Days Sales Outstanding (DSO) |
= |
(36 + 30 + 18)/ 3 |
|
|
= |
84/3 |
|
|
= |
28 |