Day Sales Outstanding (DSO) is a financial metric that measures the average number of days it takes for a company to collect payment after a product or service sale has been made. It’s a key indicator of how well a company is managing its working capital and accounts receivable operations, as it reflects the speed and efficiency with which the company is collecting payments from customers. By understanding and examining this number, companies can identify problem areas within their accounts receivable processes. Increased DSO means extended periods of time during which a company isn’t receiving payments, while decreased DSO means the opposite. Keep your finger on the pulse of your business – use DSO to measure the effectiveness of your receivables management!