Days Sales Outstanding, or DSO, is an important financial metric used to track the amount of time a company needs to collect its payments from customers. This metric tells us how long it takes a company’s credit sales to be converted into cash and can show how efficiently a business is collecting its receivables. A lower DSO number indicates that a company is collecting its receivables more quickly and managing their cash flow better; conversely, a higher DSO number suggests slower collections, which could mean an accumulation of bad debt for the company. By tracking DSO, businesses can gain a better understanding of their financial well-being and take proactive measures to increase their cash flow.