How To Calculate Average Days Sales Outstanding in Microsoft Dynamics | Arithmix

Calculating average days sales outstanding (DSO) is an essential task for any business that wants to keep track of its financial health. 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 a crucial metric for businesses that want to manage their cash flow effectively and ensure that they have enough funds to cover their expenses.

What Is Average Days Sales Outstanding?

DSO is a financial metric that measures the average number of days 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 on average.

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

When Is It Valuable To Calculate Average Days Sales Outstanding?

Calculating DSO is valuable for businesses of all sizes and industries. It is particularly useful for businesses that offer credit terms to their customers, as it helps them manage their cash flow and ensure that they have enough funds to cover their expenses.

DSO is also valuable for businesses that want to improve their collections process and reduce the amount of time it takes to collect payment from their customers. By tracking their DSO over time, businesses can identify trends and take steps to improve their collections process, such as offering incentives for early payment or implementing more efficient invoicing and payment systems.

Overall, calculating DSO is an essential task for any business that wants to manage its cash flow effectively and ensure that it has enough funds to cover its expenses. By tracking DSO over time and taking steps to improve collections, businesses can improve their financial health and position themselves for long-term success.

How Do You Calculate Average Days Sales Outstanding in Microsoft Dynamics

Microsoft Dynamics 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 Microsoft Dynamics 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 Microsoft Dynamics, 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 Microsoft Dynamics 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 Microsoft Dynamics 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.