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Documentation Index

Fetch the complete documentation index at: https://docs.upflow.io/llms.txt

Use this file to discover all available pages before exploring further.

Your operations come at a cost—monitor your DSO (Days Sales Outstanding) to ensure they’re not put at risk by low liquidity. This metric indicates the average number of days needed to collect your accounts receivable. The lower, the better: if your Sales are cashed in quickly, you can reinvest them in your activity. Compare your performance with your Best Possible DSO to spot areas of improvement, and set a target to incentivize your teams to reduce the discrepancy! As with all widgets, the DSO is subject to global Analytics filters and can be moved around, resized, or duplicated. Its results are exportable. Click on any value’s name in the legend to hide it or display nothing but. It shows the evolution of
  • your DSO (calculation detailed below)
  • your Best Possible DSO—displayed when the widget isn’t broken down, it shows what your debtors days would be had you been paid on time
…both compared with your target DSO. Update it from the widget management button in the top-right corner! By default, a high-level summary appears on your Homepage and the widget—in your Account receivables dashboard. For more granularity, break down the widget. Split it per workflow, Account manager… and even custom fields (including those imported from your source system)! Select up to 10 values. Filters are not cumulative (you cannot break down your DSO per account manager AND workflow): those selected last apply.

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Calculation

On Upflow, your DSO is calculated following the Countback method (read our blog article to understand our decision!). 💡 The DSO is re-calculated in real-time. It is based on
  • Invoices (all but drafts, voided, unsent, and written off—including disputed ones)
    • DSO— AR are your outstanding amount (due + overdue invoices)
    • Best Possible DSO—AR are your due amount (no overdue invoices as they’re paid on time) ​
  • Payments and credit notes (unapplied amounts are not taken into consideration)
Using the Countback method, one subtracts a set period’s gross sales (turnover) from their Account receivables and reports the result as the previous period’s AR. They move back in time, repeating the operation until the turnover exceeds the reported account receivables. The DSO equals the duration (in days) of all periods where the turnover was higher than the account receivables, summed up with the last period’s DSO pro rata (reported AR/gross sales * period’s number of days). 💡 To simplify: Account receivables are the sum of past periods’ gross sales. Deducing them one period at a time leads to the moment

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Example

Suppose one wants to calculate their DSO on the first day of April, with the following monthly turnover and £19,000 worth of Accounts receivable.
  • In March, the AR exceeded the turnover.
    • the whole period (31 days) contributes to the DSO
    • the gross sales are deducted from the account receivable and reported to February ​
  • In February, the reported AR (March’s £19K - £11K) exceeded the turnover.
    • the whole period (28 days) contributes to the DSO and is added to March’s days
    • the gross sales are deducted from the account receivable and reported to January ​
  • In January, the turnover exceeds the reported AR (February’s £11K - £1K)
    • the period’s DSO pro-rata contributes to the DSO
→ 31 + 28 + 3.1 = 62.1 days

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Cost savings calculator

Click Cost savings to open a sidebar detailing the monthly return on investment of reducing your DSO. 💡 Expand the widget for more visibility It translates into an amount, based on
  • your Sales (previous month’s by default)
  • your WACC (20% by default)
  • your DSO (previous month’s by default)
  • your target DSO (BPDSO + 5 days by default)
Update your DSO and target DSO from the Sidebar, or click More details and adjust your Sales and WACC to obtain more accurate predictions. The graph compares your DSO with your projections and objective to provide the financing costs you would save on unpaid invoices, late payments, etc. The different amounts are calculated as follows:
  • Current financing cost of DSO (monthly) = (Monthly Sales * Current DSO / 30) * (WACC/12)
  • Target financing cost of DSO (monthly) = (Monthly Sales * Target DSO / 30) * (WACC/12)
  • Savings (monthly) = Current financing cost of DSO (monthly) - Target financing cost of DSO (monthly)
Refresh your dashboard to return to default values, or save it to access your updated information in a click and share them with your team.