For example, if a company has $100,000 in accounts receivable and $10,000 in credit sales over a 30-day period, its Days Sales Outstanding (DSO) would be calculated as follows: DSO = ($100,000 / $10,000) * 30 = 300 days. This indicates that it takes the company an average of 300 days to collect payments from its customers, highlighting potential inefficiencies in accounts receivable management that may require attention.
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Emagia is a leading provider of AI-powered Order-to-Cash (O2C) automation platform that modernizes finance operations for midsize to large global businesses. Many global businesses and shared service centers use Emagia’s Autonomous O2C to transform to digital world-class operations in credit, invoicing and payments, receivables, collections, deductions, cash application and cash forecasting. Emagia solutions improve their customers DSO, cash flow, credit risk, operational cost, compliance and profitability.
