O2C VerseCalculator
DSO calculator
Days sales outstanding, by the standard method or by countback.
Days sales outstanding
—days
Enter the values to see the result.
How it is calculated
Standard. Receivables as a share of the period's credit sales, scaled to the length of the period.
DSO = ending AR ÷ credit sales in period × days in period
Countback. Start with the latest month and use up the receivables balance against each month's sales, working backwards. A month that is fully absorbed counts all its days. The month where the balance runs out counts a proportional share.
Example: AR 250 · sales 100, 100, 100 (30 days each) Month 1 absorbs 100 → 30 days Month 2 absorbs 100 → 60 days Month 3 absorbs the last 50 of 100 → 15 days Countback DSO = 75 days
Where it misleads
- Growth and seasonality. Standard DSO divides a balance at one date by sales across the whole period. If sales are climbing, the average understates how long recent invoices will take. Countback uses the most recent sales first, so it tracks timing better.
- Mixed terms. A customer base moving from Net 30 to Net 60 will show higher DSO with no change in collections performance. Pair it with best possible DSO and ADD.
- Cash sales and unapplied cash. Cash sales in the denominator flatter DSO. Unapplied cash left in AR inflates it.
- Period choice. Compare like with like: the same period length and the same method, every time.
Related: DSO · Countback DSO · CEI calculator