The difference between Days Sales Outstanding (DSO) and Days Payable Outstanding (DPO) lies in their definitions and how they are used in business.

Days Sales Outstanding is a measure of the average number of days it takes a company to collect payment after a sale has been made. It is an important metric used to assess a company’s credit management effectiveness and its ability to convert its receivables into cash quickly.

On the other hand, Days Payable Outstanding measures the average number of days it takes a company to make payments on its bills. This metric is used to determine a company’s ability to manage its payables efficiently and use its cash for investments or other opportunities.

In conclusion, DSO measures how quickly a company can get paid, while DPO measures how quickly a company can pay its debts. Both are important metrics that provide valuable insights into a company’s financial health.