How To Calculate Average Days Sales Outstanding in SAP ERP | Arithmix

Calculating Average Days Sales Outstanding (ADSO) is an important metric for any business that wants to keep track of its financial health. ADSO is a measure of how long it takes for a company to collect payment from its customers after a sale has been made. This metric is important because it gives insight into the efficiency of a company's cash flow management and can help identify potential issues with customer payments.

What Is Average Days Sales Outstanding?

ADSO 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. This metric is calculated by dividing the total accounts receivable by the average daily sales. The result is the average 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 ADSO 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 ADSO is valuable for any business that wants to keep track of its financial health. This metric can help identify potential issues with customer payments and can give insight into the efficiency of a company's cash flow management.

For example, if a company's ADSO is increasing, it could indicate that customers are taking longer to pay their invoices. This could be a sign of financial trouble for the company and could lead to cash flow issues. By monitoring ADSO, a company can identify these issues early and take steps to address them.

ADSO is also valuable for benchmarking against industry standards. By comparing ADSO to other companies in the same industry, a company can identify areas where it may be falling behind and take steps to improve its cash flow management.

In conclusion, calculating ADSO is an important metric for any business that wants to keep track of its financial health. By monitoring ADSO, a company can identify potential issues with customer payments and improve its cash flow management.

How Do You Calculate Average Days Sales Outstanding in SAP ERP

SAP ERP 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 SAP ERP 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 SAP ERP, 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 SAP ERP 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 SAP ERP 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.