Calculate my DSO
Enter figures from your balance sheet and profit & loss to get your DSO and an instant assessment.
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What is DSO?
DSO (Days Sales Outstanding) is a financial indicator that measures the average number of days it takes your company to collect cash from credit sales. The lower the DSO, the faster cash enters the business — and the healthier the company's finances.
A high DSO means the company is financing its customers with its own working capital, putting pressure on liquidity and potentially forcing unnecessary recourse to external finance.
Example: AR = £120,000 | 90-day sales = £600,000
DSO = (120,000 ÷ 600,000) × 90 = 18 days
The notes to the financial statements and the balance sheet are the usual sources for these figures. As an alternative, divide outstanding invoices by sales for the last quarter.
Sector Benchmarks — United Kingdom
Compare your company's DSO against typical figures for your sector. Data based on BACS, ONS and European trade credit studies. Under the Late Payment of Commercial Debts (Interest) Act 1998, the default B2B payment term is 30 days unless contractually agreed otherwise.
| Sector | Typical DSO | Assessment | Grade |
|---|---|---|---|
| Retail | 20–35 days | Excellent | A |
| B2B Services | 50–65 days | Acceptable | C |
| Construction | 80–110 days | High | D |
| Public Sector (B2G) | 60–100 days | Very high | E |
| UK average (SMEs) | 50–55 days | Above EU | D |
| European average (EU27) | 45 days | Reference | C |
DSO by sector — detailed analysis
Construction and public works have the highest DSO in the UK — typically between 80 and 110 days. Structural causes include public-sector contracts subject to the Public Contracts Regulations 2015 (a 30-day legal maximum for public bodies, frequently breached), retention clauses (5-10% withheld until practical completion) and long subcontracting chains.
Most common solution: invoice finance or factoring against public-sector and tier-1 contractor invoices — rates are lower because debtor risk is low, even if the payment term is long.
How to Reduce Your Company's DSO
A high DSO is not inevitable. There are practical, immediate strategies to speed up collections without damaging customer relationships — and the Late Payment of Commercial Debts Act 1998 gives you statutory leverage on overdue B2B invoices.
Invoice Finance / Factoring
Advance the value of your invoices within 24-48 hours, regardless of the customer's payment terms. Operationally, this eliminates DSO — the invoice is assigned and cash is available immediately.
More about factoring →Early-Payment Discount
Offer a 1-2% discount for customers who pay within 10-15 days instead of 60-90. It's attractive to the customer, and for you the cost is much lower than that of a bank overdraft.
Calculate funding cost →Invoice Immediately
Raise the invoice the moment a product is delivered or a service is completed, not at month-end. Every day of delay in invoicing adds directly to DSO — and to cash tied up in receivables.
Calculate late-payment interest →Frequently Asked Questions about DSO
Other Related Tools
Track this indicator automatically
Connect your ERP and see this metric in real time on your Advanta dashboard.
Advance your invoices with factoring
Reduce your DSO to zero, operationally. Receive invoice value within 24-48 hours and release capital tied up in receivables. No personal guarantees, no red tape.