Days Sales Outstanding (DSO) is an accounting metric that refers to the average number of days it takes a business to collect payment for products and services provided. DSO is generally taken as a measure of the business’s efficiency and its effectiveness at converting sales to actual revenue or cash. The lower the DSO, the more efficiently the business is operating. It is especially applicable to the accounts receivable (AR) process, which is responsible for collecting payments owed to the business. DSO is part of a larger collection of metrics that reflects on the business’s overall effectiveness at converting cash to even more cash.

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