Everyday day sales outstanding (dso) problems come down to one relationship between beginning accounts receivable, accounting period, end accounts receivable and total sales. This calculator turns those numbers into days sales outstanding (dso) and average receivables, with the working shown so you can check the result rather than simply trust it.
What Is the Day Sales Outstanding (DSO) Calculator?
The day sales outstanding (dso) calculator takes beginning accounts receivable, accounting period, end accounts receivable and total sales and turns them into days sales outstanding (dso) and average receivables.
It is the kind of calculation you would otherwise do on the back of an envelope: mechanical, repeatable and easy to get subtly wrong without noticing.
How the Day Sales Outstanding (DSO) Figure Is Built
Each result is calculated from the ones before it, so the working is fully visible. That matters when the answer is going to be quoted to somebody else and you need to be able to explain where it came from.
The figures are exactly as good as the assumptions underneath them. Check the rates, the periods and the tax treatment before you rely on the result.
Reading the Result Sensibly
A small change in an input can move the result by much more than you would expect, particularly where the calculation divides by one of the figures you supplied. That is worth understanding before you rely on a figure.
For anything that will be committed to, write the inputs down beside the result. A number you can reproduce is worth far more than one you cannot explain.
A Worked Example
Working through an example, with beginning accounts receivable set to 10, accounting period set to 5, end accounts receivable set to 2, the calculator returns average receivables of 6, and days sales outstanding (dso) of 0.3. Substitute your own figures and the same steps produce the same kind of answer.
Frequently Asked Questions
What do I need to work out days sales outstanding (dso)?
Enter beginning accounts receivable, accounting period, end accounts receivable and total sales. The calculator then works through the relationship and reports days sales outstanding (dso) and average receivables.
What does the day sales outstanding (dso) actually calculate?
It takes beginning accounts receivable, accounting period, end accounts receivable and total sales and converts them into days sales outstanding (dso) and average receivables using the standard relationship for this problem. Each step is applied in turn, so every output is traceable back to the numbers you typed in.
How should I enter beginning accounts receivable?
Use the value you actually have, in the unit shown next to the field. Enter every value in the same unit system. The calculator assumes the figures you supply are consistent, so it cannot correct a mistake that happens before the calculation starts.
Is the answer exact?
It is as exact as the formula and the inputs allow. The method itself is the standard one for this problem, so the only sources of error are the figures you enter and the precision you ask for.
Why does a small change in one value move the answer so much?
That happens when an output depends on a ratio, because dividing by a small number magnifies any change in it. Check the units first, then check whether the value you entered is in the range the relationship was designed for.