How To Calculate Days Sales Outstanding in HubSpot Sales Hub | Arithmix
Learn how to calculate Days Sales Outstanding (DSO) in HubSpot Sales Hub with our step-by-step guide. Improve your cash flow management and gain insights into your business's financial health. Start optimizing your accounts receivable process today.
Calculating Days Sales Outstanding (DSO) is an important metric for any business. It helps you understand how long it takes for your customers to pay you for the goods or services you provide. This information can be used to improve your cash flow, identify potential payment issues, and make informed decisions about credit and collections policies.
What Is Days Sales Outstanding?
Days Sales Outstanding is a measure of 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.
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.
When Is It Valuable To Calculate Days Sales Outstanding?
Calculating DSO is valuable for any business that extends credit to its customers. It helps you understand how long it takes for your customers to pay you, which can be useful in identifying potential payment issues and improving your cash flow. It can also help you make informed decisions about credit and collections policies.
For example, if your DSO is increasing, it may indicate that your customers are taking longer to pay you, which could be a sign of financial distress. In this case, you may want to review your credit policies and collections procedures to ensure that you are minimizing your risk of bad debt.
On the other hand, if your DSO is decreasing, it may indicate that your collections procedures are working well and that your customers are paying you more quickly. This can be a positive sign for your business and may indicate that you can extend more credit to your customers.
Overall, calculating DSO is an important metric for any business that extends credit to its customers. It can help you identify potential payment issues, improve your cash flow, and make informed decisions about credit and collections policies.
How Do You Calculate Days Sales Outstanding in HubSpot Sales Hub
HubSpot Sales Hub itself isn't naturally geared towards letting you calculate complex metrics like Days Sales Outstanding. As an alternative, teams typically use products like Arithmix to import data from HubSpot Sales Hub 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 HubSpot Sales Hub, combine it with data from other systems, and create calculations like 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 Days Sales Outstanding in Arithmix
Calculating metrics like Days Sales Outstanding is simple in Arithmix. Once you've created your free account, you'll be able to import your HubSpot Sales Hub data, and use it to create natural language formulas for metrics like Days Sales Outstanding.
Arithmix is designed to give you the power to build any calculations you want on top of your HubSpot Sales Hub 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.Use Arithmix free