{"id":5294,"date":"2022-06-01T08:10:00","date_gmt":"2022-06-01T06:10:00","guid":{"rendered":"https:\/\/www.gestioncreditexpert.com\/how-to-calculate-the-dso\/"},"modified":"2026-06-25T15:18:46","modified_gmt":"2026-06-25T13:18:46","slug":"how-to-calculate-the-dso","status":"publish","type":"post","link":"https:\/\/www.gestioncreditexpert.com\/en\/how-to-calculate-the-dso\/","title":{"rendered":"How to calculate the DSO?"},"content":{"rendered":"\n

<\/span>What is DSO? Definition<\/span><\/h2>\n\n

DSO (Average DSO – Daily Sales Outstanding) is a key indicator of a company’s cash management performance. It measures the number of days it takes to collect payments due from customers after the date the invoice is issued. In other words, calculating DSO<\/strong> means calculating the average duration of your company’s customer loans.<\/p>\n\n

\"How<\/figure>\n\n

<\/span>How to Calculate DSO – Definition and Calculation | GCE<\/span><\/h2>\n\n

The DSO provides important accounting information about sales that have been invoiced but are still pending collection.<\/p>\n\n

Calculated in number of days, it is sometimes referred to by the acronym NJC (Number of days of customer credits).<\/p>\n\n

<\/p>\n\n

<\/span>What are the elements of the DSO calculation?<\/span><\/h2>\n\n

The calculation of DSO is an essential indicator<\/strong> to integrate into your accounting to monitor the financial health of your company.<\/p>\n\n

There are two ways to calculate your DSO.<\/p>\n\n

\"DSO_Infographie_calculation_methods\"<\/figure>\n\n

<\/span>1) Calculate your DSO by the accounting method<\/span><\/h3>\n\n

Calculating your DSO using the accounting method involves two steps:<\/p>\n\n

    \n
  1. Establish the ratio of your total accounts receivable (including VAT) to your sales (including VAT) over a given period (i.e., accounts receivable including VAT \u00f7 sales including VAT)<\/em>.<\/li>\n\n\n\n
  2. Multiply this ratio by the number of days in the specified period.<\/li>\n<\/ol>\n\n

    Example to understand:<\/p>\n\n

    Here is the calculation of the DSO of a company with an outstanding customer amounting to 20 000 \u20ac for a turnover of 45 000 \u20ac including VAT over a period of 3 months (90 days):<\/p>\n\n

    (20 000 \u20ac \u00f7 45 000 \u20ac) x 90 d<\/em> = 40 days<\/p>\n\n

    This result indicates that on average, in this company, customers take 40 days to pay the amounts due.<\/p>\n\n

    This method of calculation is simple and allows us to differentiate between two types of DSO<\/strong>:<\/p>\n\n