DSO (Days Sales Outstanding)
Category: Finance
Also searched as: DSO
Definition (plain English)
DSO measures how many days, on average, it takes to collect cash from customers after sales are invoiced.
Why it matters commercially
High DSO ties up cash, raises credit exposure, and can make exports or wholesale sales harder to fund even when booked revenue is growing.
Example
A distributor improved DSO by enforcing proof-of-delivery acceptance rules and blocking new open-account shipments for customers past their credit limit.
Common mistake
Tracking DSO as a finance metric only, without connecting overdue invoices to buyer terms, dispute causes, credit holds, and shipment-release decisions.
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