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Days Sales Outstanding (DSO) is the single most useful number for understanding your cash-collection speed. Calculate yours in 30 seconds, compare to a regional benchmark, and find what is slowing your cash flow.
DSO = (Accounts Receivable ÷ Total Credit Sales) × Days
AR
Accounts Receivable
The total dollar value of invoices you have issued that have not yet been paid. Pull this from your Xero or QuickBooks balance sheet.
Example: $120,000
Revenue (period)
Total credit sales
Total sales over the same period the AR covers. For an annual DSO, use trailing 12 months. For monthly DSO, use the current month.
Example: $1,200,000 (trailing 12 months)
Days
Period in days
365 for annual, 30 for monthly, 90 for quarterly.
Example: 365
Where does your business sit? Lower is better — every day past your payment terms is working capital you do not have.
| Region | Avg DSO | Period | Source |
|---|---|---|---|
| United Kingdom | 29 days | early 2026 | Xero SMB analysis |
| United States | 39 days | 2025 | Atradius payment practices |
| Australia | 26 days | 2025 | Xero Australia SMB data |
| Canada | 31 days | 2024 | Sage Canada report |
| Kenya / East Africa | 51 days | 2024 | FSD Africa SMB survey |
Benchmarks sourced from published SMB analyses. See methodology notes at the bottom of the page.
AR (open invoices): $90,000. Trailing-12-month revenue: $1,200,000. Days: 365.
DSO = ($90,000 ÷ $1,200,000) × 365 = 27.4 days
What this means: This agency collects, on average, 27 days after sending an invoice. With net-30 terms and a 29-day UK SMB average, this is in the healthy range. A small improvement to 21 days would free up about $24,000 in working capital.
AR (open invoices): $160,000. Trailing-12-month revenue: $900,000. Days: 365.
DSO = ($160,000 ÷ $900,000) × 365 = 64.9 days
What this means: This consultancy is running 5 days past their stated 60-day payment terms. With retainer-heavy cash flow, a 5-day improvement would unlock roughly $13,500 of working capital without changing the customer roster.
Most small-business A/R processes operate 5-15 days slower than what they should. A free 24-hour audit shows you the three specific things slowing your cash flow.