Days Sales Outstanding Calculator
Days sales outstanding is the average number of days a business waits to be paid after making a sale. It comes from a single ratio and a single multiplication, yet it decides how much cash is trapped inside receivables — and it is routinely computed with the wrong denominator.
Days sales outstanding
30.4167
- Receivables as a share of revenue
- 8.33%
- Revenue per day
- 4,931.5068
- Receivables turnover (times per year)
- 12
Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.
The formula this calculator uses
DSO = (Accounts Receivable / Revenue) x Days
- Accounts Receivable
- Money owed by customers at the measurement date, net of doubtful-debt provisions
- Revenue
- Credit sales for the same period — cash sales never create a receivable
- Days
- Days in the period, 365 for a full year and 90 for a quarter
- DSO
- Average days a sale stays unpaid, equal to the ratio times the days
- Receivables turnover
- Times per year the balance turns over, equal to days divided by DSO
How to check the result by hand
- 1
Fix the period and gather the matching revenue
Choose the window — 365 days here — and take revenue for exactly that window, credit sales only. The 1,800,000 figure is the annual total, so daily revenue is 4931.506849315068. If the period is a quarter, use quarterly credit sales with the matching quarter-end receivables; never mix a year-end balance with quarterly revenue.
- 2
Take the receivables balance, net of provisions
Use 150,000, the amount customers actually owe, after deducting any allowance for doubtful debts. Gross receivables flatter the ratio by counting money that may never arrive. Where the balance swings seasonally, average the opening and closing figures, for example (120,000 + 180,000) / 2 = 150,000.
- 3
Divide receivables by revenue
150,000 divided by 1,800,000 gives 0.08333333333333333, the share of the period's sales still unpaid. Expressed as a percentage that is 8.33%. This ratio is the whole engine of the calculation, and it is the step where cash sales or a mismatched period do their damage.
- 4
Multiply the ratio by the days in the period
0.08333333333333333 multiplied by 365 gives 30.416666666666664 days, which is the DSO. Keep the raw ratio rather than a rounded 8.33% in this step, because rounding to two decimals here shifts the final answer by a fraction of a day.
- 5
Convert to turnover and compare with your terms
Divide the days in the period by DSO — 365 divided by 30.416666666666664 is 12.000000000000002 — to express the same fact as receivables turning over twelve times a year. Then set the result against the terms you grant: 30.42 days against net 30 is healthy, while the same figure against net 15 is not.
For worked examples, common mistakes and the limits of this formula, read the full How To Calculate Days Sales Outstanding page.