To assess AR performance using Days Sales Outstanding (DSO), calculate the average number of days it takes to collect payment from customers. A lower DSO indicates faster payment collection and efficient AR management, while a higher DSO suggests delays in receiving payments and potential cash flow issues. Regularly monitor DSO trends, compare them against industry benchmarks, and implement strategies to improve collection processes and reduce DSO over time.
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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.