DSO calculator: what your receivables are costing you
Every day of DSO is a day of your own revenue sitting in someone else's bank account. Put your numbers in below to see what pulling that back releases in cash, and what it's worth each year at your cost of capital.
No email required. Nothing is stored. The maths is printed further down the page.
Your numbers
Total invoiced revenue for the year.
Average days sales outstanding. European median is 48.5 days.
Share of remittances matched to invoices with no human touch. Top performers run 90%+.
What borrowing costs you, or what the cash would earn elsewhere.
Suggested from your 55% straight-through rate. Drag to override.
Cash released, one-off
€230,137
7 days off a €32,877 daily sales value
Annual value of that cash
€18,411
At 8.0% cost of capital
DSO before and after
58 → 51
days
How this is calculated
Cash released
(Annual revenue ÷ 365) × DSO days recovered
Annual value of that cash
Cash released × cost of capital %
Suggested days recoverable
18 × ((90% − your straight-through rate) ÷ 90%)
The 18 days is The Hackett Group's published gap between median and top-quartile DSO performers. We scale it by how far your straight-through cash application rate sits below the 90% mark those top performers hit — so a team already matching most remittances automatically is shown less headroom, not more.
Cash released is a one-off working capital release, not recurring profit. The recurring number is the annual value line: what that released cash is worth each year at your cost of capital.
Where the benchmark numbers come from
18-day DSO gap between median and top-quartile performers; European median DSO of 48.5 days; €1.4 trillion tied up in excess working capital across European companies.
The Hackett Group 2025 Working Capital Survey — Europe, 10/11/2025Receivables are now the largest single share of excess working capital — a $600 billion opportunity, within $1.7 trillion trapped overall.
The Hackett Group 2025 Working Capital Survey, 18/08/2025
Run these numbers against your actual ledger
Thirty minutes, no slides. Bring your aged debtors report and your ERP, and we'll tell you which of these days are actually recoverable and what it would take.
Key takeaway
Cash released by a lower DSO is annual revenue divided by 365, multiplied by the days recovered. The Hackett Group's 2025 Working Capital Survey puts the gap between median and top-quartile DSO performers at 18 days, with European median DSO at 48.5 days.
Where recovered DSO days actually come from
DSO rarely improves because someone chases harder. It improves when the work around the chase stops being manual: remittances matched to invoices automatically, disputes routed the day they appear instead of the week after, and chasers that stop firing at customers who have already paid.
That is why the cash application rate is an input here. A team matching 55% of remittances by hand is spending its collections capacity on reconciliation rather than collection, and every unapplied receipt keeps an invoice looking open when it isn't. Fixing the matching usually moves DSO before any change to the chasing itself.
For how this is built in practice — risk-scored collections, AI drafting chase emails with a human approval gate, the ERP kept read-only — see the AR automation service page and the complete guide to AR automation.
Questions people ask
What is DSO?
Days sales outstanding is the average number of days it takes to collect cash after a sale is invoiced. A DSO of 58 means that, on average, a euro of revenue sits as an unpaid invoice for 58 days before it reaches your bank account.
How do you calculate the cash released by reducing DSO?
Divide annual revenue by 365 to get the value of one day of sales, then multiply by the number of DSO days you recover. Cutting DSO by 7 days on €12 million of revenue releases roughly €230,000 of cash, one off.
What is a good DSO?
It varies by sector and payment terms, so the useful comparison is against your own peers rather than an absolute target. The Hackett Group's 2025 European Working Capital Survey puts the median DSO at 48.5 days, with an 18-day gap between median and top-quartile performers.
Why does the cash application rate matter for DSO?
If remittances are not matched to invoices automatically, accounts stay open after the customer has actually paid, chasers go out against paid invoices, and credit holds fire wrongly. Top performers apply 90% or more of cash straight through, which is why this calculator scales the recoverable days by how far below that mark you sit.
Is the cash released a saving?
No. It is a one-off working capital release: cash that arrives sooner and stays in the business. The recurring number is what that cash is worth each year at your cost of capital, which is the second figure this calculator shows.
Do I have to give my email to use this?
No. The calculator is fully open, prefilled with a worked example, and nothing is stored or sent anywhere. If you want the numbers checked against your own ledger, the booking link is there, but it is optional.