# How To Calculate Average Days Sales Outstanding in Kinetic | Arithmix

Learn how to calculate Average Days Sales Outstanding in Kinetic with our step-by-step guide. Improve your cash flow management and gain insights into your business's financial health.

Calculating average days sales outstanding (DSO) in Kinetic is a simple process that can provide valuable insights into the financial health of your business. DSO is a measure of how long it takes for a company to collect payment on its accounts receivable. It is calculated by dividing the total accounts receivable by the average daily sales. Here's how to calculate DSO in Kinetic:

1. First, determine the total accounts receivable for the period you want to measure. This can be found on your balance sheet or in your accounting software.
2. Next, calculate the average daily sales for the same period. This can be done by dividing the total sales by the number of days in the period.
3. Finally, divide the total accounts receivable by the average daily sales to get the DSO.

It's important to note that DSO is just one metric to consider when evaluating the financial health of your business. It should be used in conjunction with other financial ratios and metrics to get a complete picture of your company's performance.

## What Is Average Days Sales Outstanding?

DSO is a measure of how long it takes for a company to collect payment on its accounts receivable. It is calculated by dividing the total accounts receivable by the average daily sales. Essentially, DSO tells you how long it takes for your customers to pay their bills. A high DSO can indicate that your customers are taking longer to pay, which can impact your cash flow and overall financial health.

DSO is often used by businesses to evaluate their credit and collection policies. By tracking DSO over time, you can see if your efforts to improve collections are working or if changes need to be made. DSO can also be used to compare your business to industry benchmarks and competitors.

## When Is It Valuable To Calculate Average Days Sales Outstanding?

Calculating DSO can be valuable for businesses of all sizes and industries. It can provide insights into the financial health of your business and help you make informed decisions about credit and collection policies. Here are a few scenarios where calculating DSO can be particularly valuable:

• If you're experiencing cash flow issues, calculating DSO can help you identify if slow payments from customers are contributing to the problem.
• If you're considering offering credit terms to customers, calculating DSO can help you determine what terms are reasonable and sustainable for your business.
• If you're evaluating your collection policies, calculating DSO can help you see if changes need to be made to improve collections.
• If you're benchmarking your business against competitors, calculating DSO can help you see how you stack up.

Overall, calculating DSO can provide valuable insights into the financial health of your business and help you make informed decisions about credit and collection policies. It's a simple metric to calculate and should be used in conjunction with other financial ratios and metrics to get a complete picture of your company's performance.

## How Do You Calculate Average Days Sales Outstanding in Kinetic

Kinetic 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 Kinetic 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 Kinetic, 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 Kinetic 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 Kinetic 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.