DSO compresses the whole collections picture into one number: how many days of revenue are currently stuck in unpaid invoices. DSO = (accounts receivable ÷ revenue for the period) × days in the period. With $90,000 outstanding against $270,000 of quarterly revenue: 90 ÷ 270 × 91 ≈ 30 days — on average, a month passes between invoice and cash.
The honest benchmark is your own payment terms, not an industry table. On net-30 terms a DSO near 30 means collection works as agreed; a DSO drifting toward 55 while terms stay net-30 means late payments are piling up — or invoices go out late, which counts the same and is fully self-inflicted.
Levers, in order of leverage:
- Invoice promptly. Days between work done and invoice sent add to DSO one for one.
- Due dates on every invoice, with terms agreed up front.
- A follow-up cadence keyed to the aging buckets, not to mood.
- Deposits or advance billing for new or habitually slow payers.
One small-company caution: with a handful of large invoices, monthly DSO is noisy — one big payment shifts it by weeks. Read the trend over quarters, not a single month.
In Helia, DSO isn't yet a labelled metric; its ingredients live in the receivables view — every sent invoice with its due date and days past due, plus the FX-consolidated outstanding total, which is the AR half of the formula ready to hold against the period's revenue.