How to calculate days outstanding on Excel The Today function can be used to help you calculate what invoices are outstanding on your record sheet. To do so, when generating invoices, you need to record when an invoice was issued and the due date in separate columns. The net working capital Excel template includes the main working capital graphs, overviews, metrics and includes all formulas. Such as, bridge from reported to adjusted net working capital, a recast net working capital overview, days metrics ( DSO, DIO, DPO and CCC ), main indicators (minimum, maximum, last twelve months average).

• Dso Calculation Template Excel Template
• Dso Calculation Template Excel File
• Dso Calculation Template Excel

The formula for days sales outstanding is: (Accounts receivable ÷ Annual revenue) × Number of days in the year. Example of Days Sales Outstanding. As an example of the DSO calculation, if a company has an average accounts receivable balance of $200,000 and annual sales of $1,200,000, then its DSO figure is: = 60.8 Days sales outstanding. Example 1: Calculate the Days Sales Outstanding from the following information: Net Credit Sales during the month: $644,790. Average Accounts Receivable during the month: $43,300. Calculate the receivables turnover ratio. Days Sales Outstanding = ( $43,300 / $644,790 ) × 30 days = 2.01. Example 2: Following is the trend of DSO for β.

Days Sales Outstanding (DSO):

Days Sales Outstanding is also called the average collection period or days’ sales in receivables, measures the number of days it takes a company to collect cash from its credit sales.

Alternatively, it displays how well a company can collect cash from its customers. The quicker cash can be collected, the faster this cash can be used for other tasks.

It should be remembered that both cash flows and liquidity increase with a lower day’s sales outstanding measurement.

Days Sales Outstanding Definition:

Days’ sales outstanding ratio (also called average collection period or days’ sales in receivables) is used to measure the average number of days a business takes to collect its trade receivables after they have been created. It is an activity ratio and gives information about the efficiency of sales collection activities.

Keep reading I will tell you how you will next how Days sales outstanding calculate and its usage.

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Formula Used to Calculate DSO:

The DSO ratio is calculated by dividing the ending accounts receivable by the total credit sales for the period and multiplying it by the number of days in the period. Frequently this DSO is calculated at the end of the year and multiplied by 365 days.

An example of Daily sales outstanding:

The data is taken from the financial statement of TOYO Co for the year ended 31 Dec 2014 are as follow:

Using the above illustration, we can determine that during the end of year 31 Dec 2014 it took TOYO an average of 18.82 days to collect revenue receipts from its trade debtors.

Scrutiny/ Analysis of Day Sales Outstanding:

The lower value of Days Sales Outstanding is favorable whereas a higher value is unfavorable. Though it is more expressive to create monthly or weekly trend of DSO. Any major increase in the trend is unfavorable and shows inefficiency in credit sales collection.

• Problem With Days Sales Outstanding Example

• Method to calculate days sales outstanding in excel

• dso calculation template excel

If you want to learn more about Day’s Sale Outstanding you can visit.

This days sales outstanding calculator can be used to calculate the average number of days credit a business is giving to its customers.

Accounts receivable represent amounts owed to a business for goods sold on account to customers. In order to monitor the level of accounts receivable and the collection of receivables it is useful to calculate how many days sales the accounts receivable represents. This value is referred to as days sales outstanding (DSO) or days sales in accounts receivable, and shows the average number of days the customers are taking to pay the business for sales made to them on account.

Days Sales Outstanding Formula

Dso Calculation Template Excel Template

Days sales outstanding is calculated using the days sales outstanding formula, which divides accounts receivable, taken from the balance sheet, by the average daily sales, taken from the income statement.

Using the Days Sales Outstanding Calculator

The Excel days sales outstanding calculator, available for download below, calculates the days of sales outstanding by entering details as follows:

• Enter the sales. This is the value of sales taken from the annual accounts or management accounts.
• Enter the period. This is number of days in the period, for annual accounts 365 days is used. The days sales calculator calculates the average daily sales for the period.
• Enter the accounts receivable. This is the accounts receivable (debtors) taken from the balance sheet of the accounts. If opening and closing balances are available, then the average accounts receivable balance can be used. The days sales outstanding calculator calculates the average days sales outstanding.

DSO Calculator Download

The DSO calculator is available for download in Excel format by following the link below.

Dso Calculation Template Excel File

The days sales outstanding figure calculated by this template can be used as one of the inputs for our Financial Projections Template, which provides the financial section for a business plan.

About the Author

Dso Calculation Template Excel

Chartered accountant Michael Brown is the founder and CEO of Plan Projections. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.