Average Days Sales Outstanding (often abbreviated as “DSO”) is a financial measure used to evaluate the efficiency of a company’s sales and accounts receivable processes. It measures how long, on average, it takes customers to pay their invoices after they have been issued. The lower the value of the DSO, the more efficiently the business is operating — meaning money owed is collected quicker, resulting in increased cash flow. Properly monitoring and managing DSO can greatly improve a company’s liquidity and profitability over time.