DSO isn't the whole story: The metrics credit managers use for benchmarking

For decades, Days Sales Outstanding (DSO) has been the default answer to a simple question: how well is a company collecting what it’s owed? It’s easy to calculate, explain and compare across periods, which is exactly why it became the metric many credit professionals reach for first. 

But a company can post a stable or improving DSO while still carrying rising bad debt, an aging portfolio of high-risk accounts or a shrinking cash conversion cycle that’s straining working capital. The number checks out. The reality underneath it doesn’t. 

To form a more complete view of receivables health, credit teams are tracking key performance indicators (KPIs) alongside DSO. 

Connect with us on LinkedIn: @Nacm-National @FCIB