Today we’re going to be talking about the important topic of DSO. DSO stands for Days Sales Outstanding. Most importantly, it means how long it takes for your customers to be paying you. It’s important because it directly relates to how much cash you have, which is the most important factor in the health of your business.
If you sell products or services and no one pays you, you will have no cash. You might have made lots of money on paper, but if you have no cash, you’ll be out of business. It’s very important that we track DSO – days sales outstanding – to understand how long it takes for our customers to pay us.