DSO Calculator — Methodology

Step-by-step calculation

Calculate the average number of days customers take to pay you, and see the cash you'd unlock by collecting faster.

1. 1

   Enter accounts receivable

   Total invoices outstanding at the end of your period.

2. 2

   Enter revenue for the same period

   Use net revenue — exclude VAT or sales tax to match the AR basis.

3. 3

   Set the period length

   365 for annual, 90 for quarterly, 30 for monthly.

4. 4

   Read DSO and cash tied up

   The calculator divides AR by revenue and multiplies by days. The benchmark figure shows the cash released by getting to 30-day collections.

Assumptions and overrides

Standard DSO formula. The 30-day benchmark reflects typical B2B Net 30 invoice terms. Industry norms vary — services 30-45 days, manufacturing 45-60 days, construction 60-90 days. Use net revenue (exclusive of VAT/sales tax) to match AR basis on most accounting systems.

Every region default on the calculator is editable. If your effective rate, fee, or threshold differs from the headline figure shown, type your own number into the field — the calculator recomputes instantly without leaving this page.

Review cadence and corrections

This methodology and the underlying rate defaults are reviewed at least annually, and immediately following any change to the headline rate from IRS, HMRC, or SARS. Every substantive update is recorded on the public changelog. Spotted an error? See the corrections policy for how to report it.

See the full editorial policy for the standards every page on BusCalcTools is held to.