Days Sales Outstanding (DSO) is a key performance indicator used to measure the average amount of time it takes a business to collect revenue after a sale has been made. Commonly expressed in days, DSO is calculated by dividing a company’s accounts receivable during a certain period by its total credit sales for the same period and multiplying the result by the number of days in that period. For many businesses, DSO is an important metric since it can be indicative of their customers’ payment behavior and their ability to generate cash flow from sales. By promoting prompt payments, companies can influence their DSO ratio and ensure their short-term liquidity needs are met.