DSO turns your receivables balance into a number of days, which makes it comparable across months and against your stated terms. On net-30 terms, a DSO in the high 20s to high 30s is healthy; above 60 means your effective terms are much longer than your invoices say.
It moves with sales volume, so track it alongside average days to pay and the aging report to separate 'we invoiced a lot' from 'clients are paying slower.'
Formula
DSO = (Accounts receivable ÷ Credit sales in the period) × Days in the period
Example: $120,000 open at the end of a 30-day month in which you invoiced $150,000: (120,000 ÷ 150,000) × 30 = 24 days.
In Reeve
QuickBooks Online does not report DSO. Reeve computes it from your QuickBooks data, by client, every week.