Free DSO Calculator
How much money are you leaving on the table? Calculate your Days Sales Outstanding to see how fast you're getting paid — and how much cash automated reminders could free up. No signup required.
What is DSO and why does it matter?
Days Sales Outstanding (DSO) is the average number of days it takes to collect payment after you've sent an invoice. It's one of the most important cash flow metrics for any business that invoices clients.
For trades businesses — plumbers, electricians, HVAC techs, contractors — DSO directly impacts your ability to pay for materials, make payroll, and take on new jobs. A DSO of 60 days means you're essentially financing two months of work for your clients.
The formula is simple: DSO = (Accounts Receivable / Total Revenue) × Number of Days. The lower your DSO, the faster you're getting paid.
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Frequently asked questions
What is Days Sales Outstanding (DSO)?▾
DSO measures the average number of days it takes you to collect payment after invoicing. It's calculated as: (Total Receivables / Total Revenue) × Number of Days in the Period. A lower DSO means you're getting paid faster.
What is a good DSO for a contractor or trades business?▾
For trades and contractors, a DSO under 30 days is excellent, 30–45 is good, 45–60 is average, and above 60 means you're likely dealing with chronic late payers. The industry average for construction-adjacent trades is around 50–65 days.
How can I reduce my DSO?▾
The most effective ways to reduce DSO are: (1) Send invoices immediately after completing work, (2) Require deposits before starting, (3) Use automated payment reminders that escalate in tone, (4) Offer early payment incentives, (5) Set clear payment terms upfront. InvoiceFlows automates steps 3 and 5.
How much cash does a high DSO cost me?▾
Every day of DSO represents one day's revenue locked up in receivables. If your daily revenue is $1,000 and your DSO is 60 instead of 30, that's $30,000 more cash trapped at any given time — money that could be used for materials, payroll, or growth.
How accurate is the improvement estimate?▾
The estimate is based on industry research showing that automated AR follow-up typically reduces DSO by 10–20 days for small businesses. We use a conservative 14-day improvement (or 30% for businesses that already have low DSO). Your actual results will vary based on your clients and industry.
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