# Days Sales Outstanding (DSO) Formula + Calculator

Enter the total accounts receivable, net sales, and number of days into the calculator to determine the days sales outstanding.

## Days Sales Outstanding Formula

The following equation can be used to calculate the days sales outstanding.

DSO = AR / (NS / #D)

• Where DSO is the days sales outstanding
• AR is the accounts receivable
• NS is the net sales
• #D is the number of days

## Days Sales Outstanding Definition

Days sales outstanding, or DSO for short, is the average number of days it takes a company to receive payment on sold goods. Since companies typically have certain payment terms with clients, this is often 30+ days.

## Days Sales Outstanding Example

How to calculate days sales outstanding?

1. First, determine the total number of days.

Determine the total time period being analyzed in days.

2. Next, determine the total accounts receivable.

Calculate the total accounts receivable during the time period.

3. Next, determine the total net sales.

Calculate the total net sales during the time period.

4. Finally, calculate the DSO.

Calculate the days sales outstanding using the formula above.

## FAQ

What are days sales outstanding?

The days sales outstanding are the average number of days it takes for a company to receive money on sales.

What is a good days sales outstanding?

Typically, for credit based business, 30 days is a good time frame to shoot for.