Day Sales Outstanding or DSO is a financial indicator that shows the average number of days it takes to convert a company's accounts receivable into cash. It is a measure of the effectiveness of a company's credit control function and procedures. The calculator below shows how an improvement in DSO can affect the cashflow and profitability of a company. Outsourcing credit control to a specialst such as TAK can mean that improvements in cashflow pay for the service many times over. DSO is calculated by dividing accounts receivable by sales and multiplying this by the number of days in the respective period.
Regular DSO = (Total Receivables/Total Credit Sales) x Number of Days
Best Possible DSO - used only with reference to current value of receivables. It shows the number of days it takes to collect the debt in current period. To calculate it the following information is required:
Best Possible DSO = (Current Receivables/ Total Credit Sales) x Number of Days
Using the calculator below you can estimate how TAK-Outsourcing can improve your cashflow:
TAK-Outsourcing makes a 10% improvement and you could:
TAK-Outsourcing makes a 20% improvement and you could:
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