How To Calculate Average Days Sales Outstanding in Salesforce | 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 and can give you insight into your cash flow and 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's 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 average DSO is valuable for several reasons. First, it can help you identify potential cash flow issues. If your DSO is increasing, it could mean that your customers are taking longer to pay their invoices, which can put a strain on your cash flow.

Second, it can help you identify problem customers. If you have customers who consistently take longer to pay their invoices than others, it could be a sign that they are having financial difficulties or that they are not satisfied with your product or service.

Finally, calculating average DSO can help you benchmark your performance against industry standards. If your DSO is higher than the industry average, it could be a sign that you need to improve your collections process or that you need to offer more flexible payment terms to your customers.

Overall, calculating average DSO is an important metric for any business. It can help you identify potential cash flow issues, problem customers, and benchmark your performance against industry standards. By following the steps outlined in this article, you can easily calculate your average DSO and gain valuable insights into your financial health.

How Do You Calculate Average Days Sales Outstanding in Salesforce

Salesforce 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 Salesforce and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers you'll powerful yet easy to use. With Arithmix you can import data from systems like Salesforce, 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 Salesforce 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 Salesforce 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.