Calculate Days Sales Outstanding (known as DSO or CDO) is a formula used in finance and accounting to measure the average number of days it takes for businesses to collect payments from customers. To calculate DSO, divide the total amount of outstanding customer payments by the average daily sales during that period. The resulting calculation gives an understanding of how efficient a company is at collecting payments due for goods or services delivered on credit. It can serve as a useful metric for forecasting sales and liquidity. A lower DSO means customers are paying faster, indicating good cash flow management and fewer problems with late payments.