How To Calculate Average Days Sales Outstanding in Acumatica | Arithmix

Calculating average days sales outstanding (DSO) is an important metric for any business. It helps you understand how long it takes for your customers to pay their invoices, which can impact your cash flow and overall financial health. In this article, we'll walk you through how to calculate average DSO and why it's valuable to do so.

What Is Average Days Sales Outstanding?

DSO is a measure of how long it takes for a company to collect payment from its customers after a sale has been made. It is calculated by dividing the total accounts receivable by the average daily sales. The result is the number of days it takes for a company to collect payment from its customers.

For example, if a company has $100,000 in accounts receivable and its average daily sales are $10,000, the DSO would be 10 days. This means it takes the company an average of 10 days to collect payment from its customers.

When Is It Valuable To Calculate Average Days Sales Outstanding?

Calculating DSO is valuable for any business, but it is particularly important for those with a high volume of sales and a large customer base. By understanding how long it takes for customers to pay their invoices, businesses can better manage their cash flow and make more informed decisions about credit terms and collections.

For example, if a business has a high DSO, it may want to consider offering incentives for early payment or tightening its credit terms to encourage customers to pay more quickly. On the other hand, if a business has a low DSO, it may be able to offer more flexible payment terms to attract new customers.

Overall, calculating average DSO is a simple yet powerful way to gain insight into your business's financial health and make informed decisions about credit and collections. By following the steps outlined in this article, you can easily calculate your own DSO and start using this valuable metric to drive your business forward.

How Do You Calculate Average Days Sales Outstanding in Acumatica

Acumatica itself isn’t naturally geared towards letting you calculate complex metrics like Average Days Sales Outstanding. As an alternative, teams typically use products like Arithmix to import data from Acumatica and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Acumatica, combine it with data from other systems, and create calculations like Average Days Sales Outstanding.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Average Days Sales Outstanding in Arithmix

Calculating metrics like Average Days Sales Outstanding is simple in Arithmix. Once you've created your free account, you’ll be able to import your Acumatica data, and use it to create natural language formulas for metrics like Average Days Sales Outstanding.

Arithmix is designed to give you the power to build any calculations you want on top of your Acumatica data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.