To keep an organization healthy, monitoring metrics is key. There are many important metrics to monitor regularly but this month, I want to focus your attention on a article I recently read about Days Sales Outstanding (DSO).
This metric will give an organization an idea about how fast cash is coming in and how improvements to the collections process is making a difference.
To calculate the DSO, do the following calculation:
Accounts Receivables ÷ (Net Sales ÷ 365 Calendar Days)
For ideas on how to improve your collections process and DSO, read this article on CFO.com.
If you need customized financial advice for your business, I welcome you to contact me at 214-454-9051 or email@example.com.