{"id":999978871,"date":"2025-10-06T23:16:51","date_gmt":"2025-10-06T16:16:51","guid":{"rendered":"https:\/\/bizzi.vn\/?p=999978871"},"modified":"2026-06-09T13:51:33","modified_gmt":"2026-06-09T06:51:33","slug":"what-is-dso","status":"publish","type":"post","link":"https:\/\/bizzi.vn\/en\/what-is-dso\/","title":{"rendered":"What is DSO? Analysis of vital indicators in cash flow management and debt collection"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">DSO is not only an accounting number but also a strategic indicator for businesses to balance cash flow, credit risk and business performance. The following article by Bizzi will clarify the concept, formula and meaning of DSO. At the same time, Bizzi will give advice and provide effective DSO management strategies for businesses.<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Index<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewbox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewbox=\"0 0 24 24\" version=\"1.2\" baseprofile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#DSO_la_gi_Dinh_nghia_va_Tam_quan_trong_cua_DSO_doi_voi_ke_toan_tai_chinh_va_kinh_doanh\" >What is DSO? Definition and Importance of DSO for Accounting, Finance and Business<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#Dinh_nghia_Days_Sales_Outstanding_DSO\" >Days Sales Outstanding (DSO) Definition:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#Y_nghia_cua_DSO_tu_3_goc_nhin\" >Meaning of DSO from 3 perspectives:<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#Goc_nhin_Ke_toan_DSO_giup_bo_phan_ke_toan_nam_duoc_nhip_dong_tien_va_quan_ly_cong_no_hieu_qua_Nho_theo_doi_DSO_ke_toan_co_the\" >Accounting Perspective: DSO helps the accounting department grasp the cash flow rhythm and manage debts effectively. By monitoring DSO, accountants can:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#Goc_nhin_Tai_chinh\" >Financial Perspective<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#Goc_nhin_Kinh_doanh\" >Business Perspective<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#Cong_thuc_tinh_DSO_la_gi_Gioi_thieu_phuong_phap_Dem_nguoc\" >What is the formula for calculating DSO? Introducing the Countdown method<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#Pham_vi_ap_dung\" >Scope of application:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#Cong_thuc_tinh\" >Calculation formula:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#Phuong_phap_Dem_nguoc_Count-back_Method\" >Count-back Method<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#Danh_gia_Ty_le_DSO_%E2%80%9CTot%E2%80%9D_hay_%E2%80%9CXau%E2%80%9D\" >DSO Ratio Evaluation: \u201cGood\u201d or \u201cBad\u201d?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#Y_nghia_chung\" >General meaning<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#4_yeu_to_dien_hinh_can_can_nhac_theo_ngu_canh_khi_danh_gia_DSO_la_gi\" >What are the four typical factors to consider contextually when evaluating DSO?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#Nguyen_nhan_va_Giai_phap_Quan_tri_DSO_la_gi\" >What are the Causes and Solutions for DSO Management?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#Cac_van_de_pho_bien_dan_den_DSO_cao\" >Common problems that lead to high DSO<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#3_chien_luoc_cat_ngan_DSO\" >3 Strategies to Shorten DSO<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#Vai_tro_cua_Tu_dong_hoa_trong_viec_Kiem_soat_DSO_la_gi\" >What is the Role of Automation in DSO Control?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#Quan_ly_cong_no_tu_dong_%E2%80%93_nguon_du_lieu_bao_cao_theo_thoi_gian_thuc\" >Automated debt management \u2013 real-time data sources &amp; reporting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#Tu_dong_hoa_nhac_no_%E2%80%93_day_nhanh_dong_tien_vao_bang_hanh_dong_chu_dong\" >Automate debt collection \u2013 accelerate cash flow with proactive action<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#Dam_bao_tinh_chinh_xac_cua_hoa_don\" >Ensure the accuracy of invoices:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#DSO_trong_Buc_tranh_Tai_chinh_Tong_the_doanh_nghiep\" >DSO in the Overall Financial Picture of the Enterprise<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#DSO_va_Vong_quay_khoan_phai_thu_Accounts_Receivable_Turnover\" >DSO and Accounts Receivable Turnover<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#DSO_va_Chu_ky_chuyen_doi_tien_mat_Cash_Conversion_Cycle_%E2%80%93_CCC\" >DSO and Cash Conversion Cycle (CCC)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#DSO_va_DPO_Days_Payable_Outstanding\" >DSO and DPO (Days Payable Outstanding)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#CEI_va_BPDSO\" >CEI and BPDSO<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/bizzi.vn\/en\/what-is-dso\/#Ket_luan\" >Conclude<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"DSO_la_gi_Dinh_nghia_va_Tam_quan_trong_cua_DSO_doi_voi_ke_toan_tai_chinh_va_kinh_doanh\"><\/span><b>What is DSO? Definition and Importance of DSO for Accounting, Finance and Business<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">To better understand the nature of DSO, let&#039;s find out specific information about the definition and importance of DSO in finance and business.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Dinh_nghia_Days_Sales_Outstanding_DSO\"><\/span><b>Days Sales Outstanding (DSO) Definition:<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">What is DSO? DSO stands for Days Sales Outstanding. This is an index that measures the average number of days it takes a business to collect money from issued invoices. (Unit: day)<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The lower the DSO index, the faster the business collects money. <a href=\"https:\/\/bizzi.vn\/dong-tien-la-gi-bi-quyet-kiem-soat-va-toi-uu-dong-tien-hieu-qua-voi-giai-phap-tu-dong-hoa-tai-chinh\/\">cash flow<\/a> into stability. Conversely, a high DSO indicates tied up funds, posing a liquidity risk.<\/span><\/p>\n<figure id=\"attachment_999978872\" aria-describedby=\"caption-attachment-999978872\" style=\"width: 1890px\" class=\"wp-caption aligncenter\"><img fetchpriority=\"high\" decoding=\"async\" class=\"wp-image-999978872 size-full\" src=\"https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-1.png\" alt=\"What is DSO?\" width=\"1890\" height=\"1050\" title=\"\" srcset=\"https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-1.png 1890w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-1-300x167.png 300w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-1-1024x569.png 1024w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-1-768x427.png 768w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-1-1536x853.png 1536w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-1-18x10.png 18w\" sizes=\"(max-width: 1890px) 100vw, 1890px\" \/><figcaption id=\"caption-attachment-999978872\" class=\"wp-caption-text\">DSO is an index that measures the average number of days it takes a business to collect payment from invoices issued.<\/figcaption><\/figure>\n<h3><span class=\"ez-toc-section\" id=\"Y_nghia_cua_DSO_tu_3_goc_nhin\"><\/span><b>Meaning of DSO from 3 perspectives:<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li aria-level=\"1\">\n<h4><span class=\"ez-toc-section\" id=\"Goc_nhin_Ke_toan_DSO_giup_bo_phan_ke_toan_nam_duoc_nhip_dong_tien_va_quan_ly_cong_no_hieu_qua_Nho_theo_doi_DSO_ke_toan_co_the\"><\/span><b>Accounting Perspective: <\/b><span style=\"font-weight: 400;\">DSO helps the accounting department grasp the cash flow rhythm and <a href=\"https:\/\/bizzi.vn\/quan-ly-cong-no-la-gi-giai-phap-quan-ly-cong-no-hieu-qua-cho-doanh-nghiep\/\">debt management<\/a> efficiency. By tracking DSO, accountants can:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">G<\/span><span style=\"font-weight: 400;\">maintain a steady cash flow.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Support for adjusting payment terms (e.g. 30 days, 45 days).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Helps detect bad debt early by monitoring unusual increases in the index.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h4><span class=\"ez-toc-section\" id=\"Goc_nhin_Tai_chinh\"><\/span><strong>Financial Perspective<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Is an indicator of the cash flow health of the business.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">High DSO: money is \u201cstuck\u201d in receivables, reducing liquidity and increasing working capital pressure.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Low DSO: shows that the business collects money quickly, improving liquidity and reducing financial risk.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h4><span class=\"ez-toc-section\" id=\"Goc_nhin_Kinh_doanh\"><\/span><strong>Business Perspective<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">DSO reflects the efficiency of debt collection processes and customer payment habits.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">An increase in DSO can signal: the customer has credit problems or the sales team is lax in managing contracts and debts.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">From here, businesses can tighten credit policies or reclassify customers according to risk level.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>Understanding what DSO is not only helps accountants track debts, finance control cash flow but also helps businesses optimize customer relationships. This is an important indicator to maintain financial health and efficient operation of the business.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Cong_thuc_tinh_DSO_la_gi_Gioi_thieu_phuong_phap_Dem_nguoc\"><\/span><b>What is the formula for calculating DSO? Introducing the Countdown method<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Below is the formula and scope of application for DSO.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Pham_vi_ap_dung\"><\/span><b>Scope of application:<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">Applies to credit sales (customers buy now, pay later).<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">Can be calculated monthly, quarterly, or yearly to track debt collection performance.<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Cong_thuc_tinh\"><\/span><b>Calculation formula:<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Below is the most common DSO calculation formula:<\/span><\/p>\n<ul>\n<li aria-level=\"1\"><b>DSO = (Total Accounts Receivable \/ Sales Revenue) *Number of Days<\/b><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">In there:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">DSO: Average days to collect receivables<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\"><a href=\"https:\/\/bizzi.vn\/account-receivable-ar-la-gi-quan-ly-hieu-qua-khoan-phai-thu-de-toi-uu-chi-phi-doanh-nghiep\/\">Accounts Receivable (AR)<\/a>: Total amount of money the customer owes at the time of calculation.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Annual credit sales: Revenue generated from sales but not yet collected.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Number of days in period: Can be 30 (month), 90 (quarter) or 365 (year).<\/span><\/li>\n<\/ul>\n<p><em><span style=\"font-weight: 400;\">Illustration:<\/span><\/em><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Credit sales in September: 3,000,000,000 VND<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ending receivables (September 30): VND 1,200,000,000<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Number of days in period: 30 days<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">DSO= (1,200,000,000\/3,000,000,000) *30 = 12 days<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Thus, it took businesses an average of 12 days to collect debts in September.<\/span><\/p>\n<figure id=\"attachment_999978874\" aria-describedby=\"caption-attachment-999978874\" style=\"width: 1024px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" class=\"wp-image-999978874 size-full\" src=\"https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-3.webp\" alt=\"What is DSO?\" width=\"1024\" height=\"535\" title=\"\" srcset=\"https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-3.webp 1024w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-3-300x157.webp 300w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-3-768x401.webp 768w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-3-18x9.webp 18w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption id=\"caption-attachment-999978874\" class=\"wp-caption-text\">The DSO formula applies to credit sales (customers buy now, pay later).<\/figcaption><\/figure>\n<h3><span class=\"ez-toc-section\" id=\"Phuong_phap_Dem_nguoc_Count-back_Method\"><\/span><b>Count-back Method<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">In addition to the average formula, businesses can also apply <\/span><b>Count-back Method<\/b><span style=\"font-weight: 400;\">, an advanced method that accurately determines the actual collection time.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Instead of relying solely on the average receivable balance, this method goes back in time to determine what sales have yet to be paid.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">How to do:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Determine the balance of receivables at the end of the period.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Compare to daily (or weekly) sales.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Work backwards until the balance is \u201ccovered\u201d by the revenue generated.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Advantage:<\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Shows actual collection time, not \u201cclouded\u201d by averages.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">Especially useful for businesses with highly fluctuating revenue seasonally or by project<\/span><b>.<\/b><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Danh_gia_Ty_le_DSO_%E2%80%9CTot%E2%80%9D_hay_%E2%80%9CXau%E2%80%9D\"><\/span><strong>DSO Ratio Evaluation: \u201cGood\u201d or \u201cBad\u201d?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">DSO is an important indicator of a company\u2019s debt collection rate and cash flow management efficiency. However, low or high DSO does not always mean \u201cgood\u201d or \u201cbad\u201d. To make an accurate assessment, it is necessary to consider the industry context, size, business strategy and trends over time.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Y_nghia_chung\"><\/span><strong>General meaning<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Low DSO (good):<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Businesses collect debts quickly, customers pay early on average.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Help <\/span><b>stable cash flow<\/b><span style=\"font-weight: 400;\">working capital <\/span><b>effective rotation<\/b><span style=\"font-weight: 400;\">, reducing the need for short-term debt.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Show <\/span><b>strict debt management process<\/b><span style=\"font-weight: 400;\"> and good customer quality.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>High DSO (bad):<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Customers pay late, collection time is long.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Potential <\/span><b>liquidity risk<\/b><span style=\"font-weight: 400;\">, putting pressure on cash flow and the ability to pay short-term obligations.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Can reflect <\/span><b>poor debt collection process<\/b><span style=\"font-weight: 400;\">, loose credit terms or risk of customer default.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<figure id=\"attachment_999978876\" aria-describedby=\"caption-attachment-999978876\" style=\"width: 848px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" class=\"wp-image-999978876 size-full\" src=\"https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-5.jpeg\" alt=\"What is DSO?\" width=\"848\" height=\"994\" title=\"\" srcset=\"https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-5.jpeg 848w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-5-256x300.jpeg 256w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-5-768x900.jpeg 768w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-5-10x12.jpeg 10w\" sizes=\"(max-width: 848px) 100vw, 848px\" \/><figcaption id=\"caption-attachment-999978876\" class=\"wp-caption-text\">To evaluate whether high and low DSO is good or bad, it is necessary to consider both the industry context, size, business strategy and trends over time.<\/figcaption><\/figure>\n<h3><span class=\"ez-toc-section\" id=\"4_yeu_to_dien_hinh_can_can_nhac_theo_ngu_canh_khi_danh_gia_DSO_la_gi\"><\/span><b>What are the four typical factors to consider contextually when evaluating DSO?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">There are many factors that affect DSO, but below are the four most common factors chosen for evaluation:<\/span><\/p>\n<ul>\n<li aria-level=\"1\"><b>Industry Benchmark:<\/b>\n<ul>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">Each industry has different characteristics. For example, the construction industry often has a high DSO due to the long-term nature of contracts, while retail often has a very low DSO due to prompt payment.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Business Size:<\/b><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li aria-level=\"2\">Large enterprises often achieve lower DSOs due to their corporate governance systems. <span style=\"font-weight: 400;\">debt and strict collection process.<\/span><\/li>\n<li aria-level=\"2\"><span style=\"font-weight: 400;\">Small businesses may be more flexible, but are at risk of customers taking over capital.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li><b>Trend over time:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Looking at DSO changes over quarters\/years is more important than looking at a single value.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Decreasing DSO: a sign of improving debt management.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Increasing DSO: risk warning, need to review debt collection process.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\"><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Business policy &amp; strategy:<\/b><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Sometimes a high DSO isn&#039;t necessarily \u201cbad\u201d: it could be a market expansion strategy, where a business accepts longer credit terms from customers to build relationships and increase market share.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The important thing is whether DSO is under control and in line with long-term financial strategy.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">In general, there is no \u201cabsolute threshold\u201d for DSO. Businesses should evaluate DSO in the context of their industry, size, trends, and strategy, rather than just looking at high or low numbers.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Nguyen_nhan_va_Giai_phap_Quan_tri_DSO_la_gi\"><\/span><b>What are the Causes and Solutions for DSO Management?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">High DSO is not only due to customers but also due to poor internal management of the business. DSO management does not stop at a technical measure to reduce the average number of days to collect payment, but is essentially optimizing the entire financial process chain, from issuing invoices, controlling debts, to reporting and decision making.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Cac_van_de_pho_bien_dan_den_DSO_cao\"><\/span><b>Common problems that lead to high DSO<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Policy &amp; Procedure Issues<\/b><b><br \/>\n<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\">Loose credit policy<span style=\"font-weight: 400;\">: Payment terms are too long or customers are not classified according to risk.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\">Incorrect or late invoices<span style=\"font-weight: 400;\">: Causing payment delays, loss of reputation with customers.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Customer Behavior &amp; Debt Collection Issues<\/b><b><br \/>\n<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Customers pay late due to lack of timely reminders.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\">Businesses lack clear internal debt collection processes, leading to inconsistent debt management.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"3_chien_luoc_cat_ngan_DSO\"><\/span><b>3 Strategies to Shorten DSO<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Credit Policy Review<\/b><b><br \/>\n<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\">Classify customers by risk level and set clear credit limits for each group.<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Reduce the possibility of overdue and bad debt risk.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Simplify Payment Terms<\/b><b><br \/>\n<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Create terms that are transparent, understandable, and accessible.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Make it easy for customers to make payments on time.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Proactive Debt Collection<\/b><b><br \/>\n<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\">Build an automatic debt reminder schedule via email, SMS or phone.<br \/>\n<span style=\"font-weight: 400;\">Ensure consistent reminders, reducing the risk of forgetting or late payments.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">\u00a0Applying all three strategies simultaneously will help <\/span><b>Reduce DSO, improve cash flow and enhance debt management efficiency<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Vai_tro_cua_Tu_dong_hoa_trong_viec_Kiem_soat_DSO_la_gi\"><\/span><b>What is the Role of Automation in DSO Control?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Effective DSO management is not just about measurement, but also about <\/span><b>optimize debt collection process<\/b><span style=\"font-weight: 400;\"> to keep cash flow into the business stable. This is the reason <\/span><b>financial automation<\/b><span style=\"font-weight: 400;\"> become a strategic tool. Bizzi.vn provides a comprehensive solution to help CFOs, accountants and debt collection teams control DSO quickly, accurately and transparently.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Quan_ly_cong_no_tu_dong_%E2%80%93_nguon_du_lieu_bao_cao_theo_thoi_gian_thuc\"><\/span><b>Automated debt management \u2013 real-time data sources &amp; reporting<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Track level of detail:<\/b><span style=\"font-weight: 400;\"> Bizzi&#039;s ARM records each invoice, date, due date, payment history of each customer and status (reconciled\/disputed\/late).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Aging Report &amp; DSO realtime:<\/b><span style=\"font-weight: 400;\"> Dashboard continuously updates buckets (0-30, 31-60, 61-90, 90+ days) and DSO periodically (daily\/monthly\/quarterly) \u2013 helping CFOs\/collectors detect increasing DSO trends as soon as they appear.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Automatic dispute reconciliation &amp; classification:<\/b><span style=\"font-weight: 400;\"> When an invoice has a dispute (error, missing documents), the system automatically flags it and switches to the dispute resolution workflow - reducing the time it takes to &quot;erode&quot; DSO due to prolonged disputes.<\/span><\/li>\n<\/ul>\n<figure id=\"attachment_999978879\" aria-describedby=\"caption-attachment-999978879\" style=\"width: 1200px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-999978879\" src=\"https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-8.png\" alt=\"What is DSO?\" width=\"1200\" height=\"735\" title=\"\" srcset=\"https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-8.png 2560w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-8-300x184.png 300w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-8-1024x627.png 1024w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-8-768x470.png 768w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-8-1536x941.png 1536w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-8-2048x1254.png 2048w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-8-18x12.png 18w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><figcaption id=\"caption-attachment-999978879\" class=\"wp-caption-text\">Bizzi provides features to track, reconcile debts and important indicators (number of days outstanding \u2013 DSO, debt aging report, etc.) to help manage debts closely.<\/figcaption><\/figure>\n<p><b>Benefit:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Reduce bad debt risk.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Optimize cash flow, keep the company always have working capital.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Support decision making based on real data, not relying on manual reporting.<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Tu_dong_hoa_nhac_no_%E2%80%93_day_nhanh_dong_tien_vao_bang_hanh_dong_chu_dong\"><\/span><b>Automate debt collection \u2013 accelerate cash flow with proactive action<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">One of the main reasons for high DSO is <\/span><b>customers forget or delay payments<\/b><span style=\"font-weight: 400;\">. Bizzi.vn solves this problem through <\/span><a href=\"https:\/\/bizzi.vn\/quan-ly-cong-no\/\"><b>debt reminder automation<\/b><\/a><span style=\"font-weight: 400;\">:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Automatic debt reminder chain:<\/b><span style=\"font-weight: 400;\"> Set up scenarios (pre-due reminder \u2192 due day \u2192 7\/15\/30 days overdue \u2192 escalation). Bizzi sends emails\/SMS automatically to each customer group.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Personalization &amp; Segmentation:<\/b><span style=\"font-weight: 400;\"> Automatically change the frequency and tone of debt reminders according to risk classification (e.g. customer A \u2013 gentle reminder; customer B \u2013 strong reminder + CC account manager).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Payment CTA Incorporation:<\/b><span style=\"font-weight: 400;\"> Send payment link \/ transfer instructions to reduce friction \u2192 easier for customers to pay.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>A\/B testing debt reminder content:<\/b><span style=\"font-weight: 400;\"> The system allows testing of message templates (schedule, content) to choose the optimal strategy for each segment.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Actual results:<\/b><span style=\"font-weight: 400;\"> Reaching customers in a timely manner, reducing \u201cforgotten\u201d payments \u2013 often results in significant improvements in DSO (e.g. reduction of several days to dozens of days depending on the business).<\/span><\/li>\n<\/ul>\n<p><b>Benefit:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Shorten debt collection time, reduce DSO.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Reduce stress and effort on debt collection team.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Increase proactive cash flow management, helping to stabilize cash flow.<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Dam_bao_tinh_chinh_xac_cua_hoa_don\"><\/span><strong>Ensure the accuracy of invoices:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b><a href=\"https:\/\/bizzi.vn\/xu-ly-hoa-don\/\">Automatic invoice processing<\/a>:<\/b><span style=\"font-weight: 400;\"> OCR + AI extracts data, checks tax codes, supplier information, contract numbers...<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>3-way matching:<\/b><span style=\"font-weight: 400;\"> Automatically compare Invoice \u2194 PO \u2194 Warehouse Receipt; if there is any difference, the system will automatically create a dispute ticket and send it to the relevant department.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Reduce \u201cnon-payment\u201d due to errors:<\/b><span style=\"font-weight: 400;\"> Many invoices are paid late due to incorrect information or missing documentation \u2013 automated processing and early warning will reduce this rate.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Optimizing dispute resolution process:<\/b><span style=\"font-weight: 400;\"> When disputes occur, the system tracks SLAs, assigns handlers, and updates status \u2013 reducing dispute closure time, thereby reducing DSO<\/span><\/li>\n<\/ul>\n<figure id=\"attachment_999978877\" aria-describedby=\"caption-attachment-999978877\" style=\"width: 1200px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-999978877\" src=\"https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-6.png\" alt=\"What is DSO?\" width=\"1200\" height=\"723\" title=\"\" srcset=\"https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-6.png 2048w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-6-300x181.png 300w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-6-1024x617.png 1024w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-6-768x463.png 768w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-6-1536x926.png 1536w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/10\/DSO-la-gi-6-18x12.png 18w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><figcaption id=\"caption-attachment-999978877\" class=\"wp-caption-text\">Bizzi automatically compares 3-way smart Invoices - Orders - Warehouse Receipts<\/figcaption><\/figure>\n<p><b>Benefit:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Prevent invoice errors \u2013 the reason why customers delay payment.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ensure debt data is always accurate and reliable.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Accelerate cash inflow, reduce DSO sustainably.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"DSO_trong_Buc_tranh_Tai_chinh_Tong_the_doanh_nghiep\"><\/span><b>DSO in the Overall Financial Picture of the Enterprise<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Looking at DSO in the overall financial picture is necessary because DSO not only reflects debt collection efficiency but also directly affects cash flow, working capital and financial capacity of the entire enterprise.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"DSO_va_Vong_quay_khoan_phai_thu_Accounts_Receivable_Turnover\"><\/span><b>DSO and Accounts Receivable Turnover<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Distinguish:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">DSO measures the average number of days it takes to collect receivables.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Receivables turnover measures the frequency of collection of debts during the period. (Receivables Turnover = Credit Sales \/ Average Receivables).<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Additional relationships:\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Low DSO \u2194 High turnover \u2192 Fast paying customers, stable cash flow.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">High DSO \u2194 Low Turnover \u2192 Funds are locked for a long time, increasing liquidity risk.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Understanding both metrics simultaneously helps businesses <\/span><b>optimize credit policy and control working capital<\/b><span style=\"font-weight: 400;\">, instead of just looking at a simple average number.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"DSO_va_Chu_ky_chuyen_doi_tien_mat_Cash_Conversion_Cycle_%E2%80%93_CCC\"><\/span><b>DSO and Cash Conversion Cycle (CCC)<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li><strong>Formula: CCC = DSO + DIO \u2013 DPO<\/strong><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">In there:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>DSO (Days Sales Outstanding):<\/b><span style=\"font-weight: 400;\"> Time to collect payment from customers.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>DIO (Days Inventory Outstanding):<\/b><span style=\"font-weight: 400;\"> Average number of days inventory.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>DPO (Days Payable Outstanding):<\/b><span style=\"font-weight: 400;\"> Number of days to pay suppliers.<\/span><\/li>\n<\/ul>\n<p><b>Role of DSO:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">DSO is <\/span><b>the most important ingredient in CCC<\/b><span style=\"font-weight: 400;\"> because it reflects the speed of cash collection from core business operations.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Helps CFOs forecast working capital needs, balance income and expenses, and plan investments or debt repayments.<\/span><\/li>\n<\/ul>\n<p><b>Actual impact:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Short CCC \u2194 Businesses collect money faster, maintaining efficient cash flow.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">High DSO \u2194 Extended CCC \u2192 Working capital locked up, liquidity pressure increases.<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"DSO_va_DPO_Days_Payable_Outstanding\"><\/span><b>DSO and DPO (Days Payable Outstanding)<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li><b>DSO:<\/b><span style=\"font-weight: 400;\"> Reflects the speed of collecting money from customers.<\/span><\/li>\n<li><b>DPO:<\/b><span style=\"font-weight: 400;\"> Reflects the time it takes to pay suppliers.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Monitor DSO (cash in) and DPO (cash out) in parallel to balance income and expenditure, avoiding the situation of &quot;cash out faster than cash in&quot;, leading to capital shortage.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">For example: DSO = 30 days, DPO = 45 days \u2192 the business holds cash longer than the time it takes to pay debts, improving liquidity.<\/span><\/li>\n<\/ul>\n<p><b>Strategic application:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Improve DSO by improving collection process.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Negotiate reasonable DPO with suppliers to optimize working capital.<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"CEI_va_BPDSO\"><\/span><b>CEI and BPDSO<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">To gain more insight into DSO management effectiveness, businesses can use rare attributes that are rarely mentioned in conventional guides:<\/span><\/p>\n<ul>\n<li aria-level=\"1\"><b>Collection Effectiveness Index (CEI):\u00a0<\/b><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Evaluate the performance of the debt collection team based on % of debt collected according to plan.<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">High CEI \u2192 Effective debt collection, well-controlled DSO.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Low CEI \u2192 Need to review debt collection process, remind or train staff.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>BPDSO (Best Practice DSO \/ Ideal Collection Date):\u00a0<\/b><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Compare actual DSO and ideal DSO to determine how many days are \u201clost\u201d due to process delays.<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Help identify <\/span><b>How many days does it take for money to not reach the business?<\/b><span style=\"font-weight: 400;\"> due to slow collection processes or slow customer payments.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Provide a basis for process improvement, set KPIs for the collection team and reduce liquidity risk.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Overall, DSO is not just a single number but an important part of managing a business&#039;s cash flow, working capital and debt collection performance.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Ket_luan\"><\/span><b>Conclude<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">When grasping the essence <\/span><span style=\"font-weight: 400;\">What is DSO, <\/span><span style=\"font-weight: 400;\">Managers will understand that Days Sales Outstanding (DSO) is not just a financial number, but a strategic indicator that reflects the business&#039;s operational efficiency, debt management and cash flow management ability.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Reducing DSO is not simply about shortening debt collection time, but also a comprehensive change in thinking and debt management process, from issuing invoices to debt reminders and payment control.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">With Bizzi.vn&#039;s specialized automation tools, businesses can proactively control cash flow, minimize risks, and prepare financial resources for ambitious expansion plans.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To get specialized solutions specifically for your business, register for a consultation here: <\/span><a href=\"https:\/\/bizzi.vn\/dat-lich-demo\/\"><span style=\"font-weight: 400;\">https:\/\/bizzi.vn\/dat-lich-demo\/<\/span><\/a><\/p>","protected":false},"excerpt":{"rendered":"<p>DSO is not only an accounting number but also a strategic indicator for businesses to balance cash flow, credit risk...<\/p>","protected":false},"author":56,"featured_media":999978875,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","inline_featured_image":false,"footnotes":""},"categories":[368],"tags":[],"class_list":["post-999978871","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-quy-trinh-phai-thu"],"acf":[],"_links":{"self":[{"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/posts\/999978871","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/users\/56"}],"replies":[{"embeddable":true,"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/comments?post=999978871"}],"version-history":[{"count":5,"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/posts\/999978871\/revisions"}],"predecessor-version":[{"id":999978972,"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/posts\/999978871\/revisions\/999978972"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/media\/999978875"}],"wp:attachment":[{"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/media?parent=999978871"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/categories?post=999978871"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/tags?post=999978871"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}