Days Sales Receivables (DSR) is a financial metric that measures how quickly a business collects payments from its customers. The DSR formula is a simple calculation that helps companies assess their credit policy and evaluate the efficiency of their accounts receivable process. It is calculated by dividing the amount of Accounts Receivable by the company’s average daily sales for a given period of time. A lower DSR indicates that the company is successfully collecting payment from customers in a timely manner, while a higher DSR signifies potential challenges in this area. Knowing how to calculate and monitor the DSR formula can help businesses ensure proper cash flow management and more reliable revenue.