Days Sales Outstanding (DSO)

Definition

The average number of days it takes to collect payment after making a sale—how much you're essentially bankrolling customers before they pay.

Example Usage

Our DSO was 60 days, meaning we had to float millions in receivables while waiting for customers to send payment.

Origin

Working capital management metric from business finance

Fun Fact

Some industries (like construction) have DSOs of 90+ days, while others (like retail) collect instantly.

Source: Working capital management

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