DSO calculator
YOUR DSO
0.0 days
✅ You are collecting faster than your industry average
💰 CASH FLOW IMPACT
Cash currently tied in AR: $0
Excess cash vs your terms: $0 (0.0 extra days)
Daily revenue value: $0/day
📈 If you reduced DSO by 7 days, you would free up: $0
BPDSO estimate: 27.0 days · Delinquent DSO: -27.0 days
Reduce DSO with automated reminders and stronger payment terms.
Start free trialWhat is Days Sales Outstanding (DSO)?
DSO measures how long it takes to collect invoice revenue. Formula: DSO = (AR ÷ Total Credit Sales) × Number of Days. If AR is $24,000 and 90-day sales are $60,000, DSO is 36 days.
How to calculate DSO, step by step
- Pick a period. A quarter (90 days) is the most stable; a month (30 days) reacts faster but swings more.
- Find your accounts receivable balance at the end of that period — the total of all unpaid invoices.
- Find your credit sales for the same period — everything you invoiced, excluding cash-at-sale revenue.
- Divide AR by credit sales, multiply by the days in the period.
Worked example. A design studio invoices $45,000 in a quarter and ends the quarter with $18,000 in unpaid invoices:
DSO = ($18,000 ÷ $45,000) × 90 = 36 days.
On Net 30 terms, 36 days means clients pay about six days late on average — acceptable. If the same studio's DSO were 50, roughly $7,000 of extra cash would be sitting in unpaid invoices at any given moment ($45,000 ÷ 90 × 14 extra days). That is the number DSO makes visible: how much of your own revenue you are lending to clients for free.
DSO formula in Excel or Google Sheets
Put accounts receivable in A1, period credit sales in B1, and days in the period in C1:
=A1/B1*C1
For a rolling monthly view, list month-end AR in column A and monthly invoiced sales in column B,
then drag =A2/B2*30 down the sheet. The trend across months matters more than any single
value — a DSO that climbs three months in a row is an early warning even if it is still "within
benchmark".
DSO benchmarks by industry (2024–2025)
| Industry | Average DSO | Best-in-class DSO | Source |
|---|---|---|---|
| Freelance/Creative | 28 days | <21 days | ChaseAI user data |
| Digital Agency | 38 days | <28 days | Atradius 2024 |
| Consulting | 32 days | <25 days | Atradius 2024 |
| Construction | 47 days | <35 days | Dun & Bradstreet |
| SaaS | 42 days | <30 days | OpenView Partners |
How to reduce your DSO
- Use shorter terms where possible.
- Require deposits on larger projects.
- Automate reminders before and after due date.
- Offer selective early-payment discounts.
- Send invoices immediately after delivery.
Related tools: AR Health Score and Late Payment Cost Calculator.
External references
Written by Pasko Djonovic, Founder at ChaseAI • Last updated May 6, 2026
