DSO
DSO is a liquidity and working-capital metric, calculated as (Ending AR ÷ Credit sales for the period) × Days in the period.
- Layer
- Metric
- Defined in
- Metric definitions
- Components
- 1
Authority
This definition follows Non-GAAP financial measure — SEC Regulation G — it is not a GAAP measure, so a registrant publishing it has to reconcile it to the nearest GAAP figure.
Every citation in this system, with the text we read and the date we checked it, is in US GAAP and where these rules come from.
Formula
(Ending AR ÷ Credit sales for the period) × Days in the period
Two formulas exist — see order to cash.
A metric without its definition is a number people argue about in meetings. Every metric component in this system requires one — see the rules.
DSO, in use
Quoted from the 3 documents that use the word — what it does to an interface, in the spec's own sentence.
DSO (with the method stated — the two formulas give different answers), best-possible DSO, ADD, CEI, % past due, bad debt rate.
DSO computed two different ways gives two different numbers, and a dashboard that doesn't say which is not comparable to anything.
"DSO" has two accepted formulas that give different answers.
For founders
The same idea written for a founder: what it costs a startup that ignores it, and what to do in a real month.
- AR aging and collections: a practical guide for startupsHow to read an AR aging, work out DSO, run a dunning cadence, record a promise to pay, escalate a late account and clear unapplied cash.
- Payment terms explained: Net 30, discounts and late feesHow to choose payment terms, count a due date, price an early-payment discount, set lawful late fees and work with enterprise procurement.
Components that render this
The concept is not documentation-only. These are the components that name it in their specification, grouped and stated exactly as the catalog states them.
10Receivables (AR)
Family specComponents that render the terms it depends on
Little in the catalog names this concept outright, but its definition is built out of others that are named. These render credit, period.
4Swaps & FX
Family spec- TrialBalanceAll accounts with the debit=credit proof.
- PeriodPickerFiscal-aware. Never assumes January.
- FluxAnalysisPeriod-over-period explanations.
- ProfitAndLossP&L with period comparison and variance.
- StatementTableThe shared shell: hierarchy, periods, rules.
- StatementToolbarBasis, period, comparison, currency, consolidation.
11Payables (AP)
Family spec12Close, controls & consolidation
Family specTerms this one depends on
Also in Liquidity & working capital
Work with this concept
The calculators that compute it and the ledger payloads that carry it. A definition is where a reader starts; these are where they go next.
- Payment terms & due dates2/10 net 30 is borrowing at 37% a year. This tells you whether to take the discount.Tool
- Sales invoicesWhat does an accounts-receivable invoice look like in each API?API
- DSO calculatorDSO is a liquidity and working-capital metric, calculated as (Ending AR ÷ Credit sales for the period) × Days in the period.Calculator
- DSO vs DPODSO measures how many days of sales are still uncollected; DPO measures how many days of purchases are still unpaid — together with inventory days they make the cash conversion cycle.Compare
Defined in Metric definitions. This page is generated from that document, so the two cannot disagree.