Average Days Outstanding (or ADO) is a business term used to measure the average amount of time it takes a company to receive payments from its customers. It’s an important metric that helps businesses assess their credit and billing procedures, as well as their overall financial health. Put simply, Average Days Outstanding tells us how long our customers are taking to pay us for goods and services. The lower the number, the more efficient the company’s payment procedure. Knowing this figure can help businesses make sure they’re not waiting too long for money that’s rightfully theirs. Tracking this important financial indicator regularly can help companies react quickly to changes in their customer’s payment habits, ensuring their cash flow remains healthy.