The Days Sales Outstanding (DSO) of a SaaS company measures the average number of days it takes to collect payments from its customers. It is typically used as a key performance indicator that helps measure the effectiveness and stability of a company’s cash collection processes. The lower the DSO, usually the better for the company, as it indicates that customer payments are being collected quickly and efficiently. Additionally, DSO also serves as a vital metric when benchmarking against industry peers. A good DSO not only reflects a healthy business relationship with customers, but also indicates strong financial performance over time.