Days Sales Outstanding (DSO)
What is DSO and how to calculate my DSO?
DSO is considered an important tool in measuring liquidity. DSO tends to increase as a company becomes less risk averse. Higher DSO can also be an indication of inadequate analysis of applicants for open account credit terms. An increase in DSO can result in cash flow problems, and may result in a decision to increase the creditor company’s bad debt reserve.
A lower DSO rate will bring a company more working capital and will decrease de amount of write off and (if applicable) cost of interest..
Do you want a lower DSO ratio for your company? In many cases Straetus not only decrease your rate with 25%.. Working with Straetus can also be more cost efficient than running your own in house receivables department.