DSO calculator
Enter your open receivables and the period's credit sales. Get your days sales outstanding, how far it sits from your stated terms, and the cash that gap is holding.
Total open invoice balance. QuickBooks: A/R Aging Summary, Total.
Everything invoiced on terms. QuickBooks: P&L (accrual), Total Income, less cash sales.
Period
Your stated terms
Computed in your browser. Nothing you enter is stored or sent.
Days sales outstanding
42.0
($210,000 ÷ $150,000) × 30 days
Gap against terms
+12.0 days
Clients pay 12 days past net 30 on average
Cash held by the gap
$60,000
$5,000 of daily sales × 12 days
Watch
A meaningful share of clients are paying late. Look at DSO by client to find who is carrying the delay.
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How it is calculated
Formula
DSO = (Accounts receivable ÷ Credit sales in the period) × Days in the period
Days sales outstanding is your receivables balance expressed as a number of days of sales. Take the open (unpaid) invoice balance at the end of the period, divide by everything you invoiced on terms during the period, and multiply by the days in the period.
The gap against terms is DSO minus your stated terms (net 30, net 45, and so on). A positive gap means clients are, on average, paying that many days late. The cash tied up by the gap is the gap in days multiplied by your average daily credit sales; it is roughly the amount that would arrive in the bank if clients paid exactly on terms.
In QuickBooks Online, the receivables balance is the Total on the A/R Aging Summary as of the period's last day, and credit sales are Total Income on an accrual-basis Profit and Loss for the period (less any cash sales that never touched receivables).
Common questions
What is a good DSO?
Close to your stated terms. On net 30, a DSO between roughly 28 and 38 is healthy; in the 40s a meaningful share of clients are paying late; above 60 your effective terms are far longer than your invoices say and follow-up needs to change.
Should I use monthly or annual numbers?
Either, as long as the receivables balance, the sales figure, and the day count all describe the same period. Monthly is noisier (one big invoice on the 30th inflates it); a trailing quarter smooths that out. Track the same period month over month.
Do I include cash sales?
No. Credit sales are invoices issued on terms. Sales paid at the time of service never sit in receivables and would make DSO look better than it is.
Where do I get these numbers in QuickBooks Online?
Receivables: Reports, A/R Aging Summary, set the date to the last day of the period, read the Total. Credit sales: Reports, Profit and Loss for the period, on accrual basis, Total Income.
Does this calculator store my numbers?
No. Everything is computed in your browser and nothing you type is sent anywhere.
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