Monthly DSO Calculation is a metric that measures the average amount of time it takes a business to receive payment after delivering goods or services. It is calculated by taking the total amount of outstanding invoices for a given month, divided by the total net sales for the same period, and multiplied by the number of days in that month. By tracking this metric, businesses can gain valuable insight into the effectiveness of their accounts receivable processes and make improvements to ensure timely payments. With the right strategies in place, companies can strive to keep their Monthly DSO Calculation lower, which simplifies budgeting and helps keep cash flow on track.