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Days Sales Outstanding (DSO)
Term Used Globally

Days Sales Outstanding (DSO)

Days Sales Outstanding is a company’s average collection period. A low
number of days indicate that the company collects its outstanding receivables quickly. The DSO figure is an
index of the relationship between outstanding receivables and sales achieved over a given period. This is
a critical consideration for staffing firms that are required (by law in some countries) to pay employees on a
frequent basis (normally weekly) while receiving payment from clients could take significant amounts of time.
In Europe, DSO is more commonly referred to as Debtor Days.


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