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DSO Cash Flow Impact Calculator

Calculate how much cash you can free up by reducing your DSO

Understanding the Calculator
How to estimate cash flow impact from DSO improvements

This calculator shows you how much cash you can free up when you reduce your Days Sales Outstanding (DSO). Shorter DSO means faster cash collection and more liquidity available for your business.

The Formula:

Cash Freed Up = (ΔDSO in days) × (Annual Credit Sales ÷ 365)

When you reduce your DSO, you're effectively shrinking your accounts receivable balance, which frees up cash for other business needs.

How it works:

  • We calculate your average daily sales (Annual Credit Sales ÷ 365)
  • We determine how many days of DSO you'll reduce (ΔDSO = Current DSO - Target DSO)
  • The product is the amount of cash you'll free up
Calculate Your Impact
Enter your financial data to estimate cash freed
$

Enter your total annual sales made on credit (not cash sales).

Enter your current Days Sales Outstanding (average collection period).

Enter your target DSO (must be lower than current DSO to free up capital).

This calculator is provided for informational purposes only and should not be considered financial advice.