Return to the full KPI dictionary.
Manufacturing KPI Dictionary
Days Sales Outstanding (DSO): definition, formula and manufacturing interpretation
Understand days sales outstanding (dso) and how to use it in manufacturing analysis.
Days Sales Outstanding (DSO)
Days Sales Outstanding (DSO)
Formula: Average AR ÷ credit sales × days
Use the KPI with product, plant, customer, supplier and period context where appropriate. Connect changes to operational and financial drivers.
See how PredictLine connects the number to the decision.
Bring a real manufacturing, finance or working-capital question to a working session. Start the conversation →
Bring a real manufacturing, finance or working-capital question to a working session. Start the conversation →
Practical interpretation and manufacturing use
DSO estimates the average number of days required to collect receivables. It helps finance teams understand the cash impact of customer terms, billing and collection performance.
Formula
DSO = Average Accounts Receivable ÷ Credit Sales × Days in Period
How to use this KPI
- Segment DSO by customer and aging pattern.
- Investigate changes in billing, disputes, payment terms and customer mix.
- Use DSO with margin and customer economics rather than optimizing collections in isolation.