Worked Walkthrough: Find What Is Actually Driving DSO
Break a DSO increase into segment drivers and choose the right improvement action.
Receivables are $2.4 million and DSO moved from 44 to 56. You need to explain the increase and recommend where the team should focus first. Segment the book, attach a blocker type, then match the action to the blocker. The common trap is acting on the blended number alone. That leads to across-the-board pressure, discounts, or policy changes that may miss the real cash release opportunity. Step 1 Split receivables into at least four buckets: within terms, over terms but undisputed, dispute/approval blocked, and strategic long-term terms. This reveals whether the DSO increase is driven by risk, process, or intentional…
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