Accounts Receivable Days (DSO) Calculator
Calculate Days Sales Outstanding (DSO) to measure how quickly a company collects payments from its customers.
How to use this tool
- Enter accounts receivable, net credit sales and period in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your days sales outstanding (dso) and the full breakdown beneath it.
Formula
DSO = (Accounts Receivable / Net Credit Sales) × Period Days
Equivalently: DSO = Accounts Receivable / Average Daily Sales
AR Turnover = Net Credit Sales / Accounts Receivable
How it works
Days Sales Outstanding (DSO) measures the average number of days a company takes to collect payment after a sale has been made. A lower DSO indicates faster collections and stronger cash flow management, while a higher DSO may signal collection difficulties or lenient credit terms. The calculation divides the ending accounts receivable balance by average daily credit sales for the chosen period.
Worked example
Company with $50,000 AR and $365,000 annual sales
- Accounts Receivable = $50,000
- Net Credit Sales = $365,000 over 365 days
- Average Daily Sales = $365,000 / 365 = $1,000 per day
- DSO = $50,000 / $1,000 = 50 days
- AR Turnover = $365,000 / $50,000 = 7.3x
DSO = 50 days — on average, customers pay within 50 days
Key terms
- Days Sales Outstanding (DSO)
- The average number of days it takes a company to collect payment following a credit sale; a key measure of liquidity and credit management efficiency.
- Accounts Receivable (AR)
- Money owed to a company by its customers for goods or services already delivered but not yet paid for.
- AR Turnover Ratio
- Net credit sales divided by accounts receivable; indicates how many times per period a company collects its average AR balance.
- Net Credit Sales
- Revenue from sales made on credit (excluding cash sales and net of returns/allowances); the denominator used in DSO.
- Cash Conversion Cycle
- A broader efficiency metric that includes DSO along with days inventory outstanding and days payable outstanding.