Written and reviewed by FormulaCraft Team. Each formula on this page is run through our verification engine before publishing.
Last reviewed:
How to calculate days sales outstanding (DSO) in Excel and Google Sheets
Excel & Google Sheets
=IFERROR((A2/B2)*C2,0)✓
Verified example
Computed by a real spreadsheet engine on the sample data below.
| AR | CreditSales | Days | DSO |
| 45000 | 150000 | 90 | =IFERROR((A2/B2)*C2,0) |
| 38000 | 180000 | 90 | =IFERROR((A3/B3)*C3,0) |
| 52000 | 160000 | 90 | =IFERROR((A4/B4)*C4,0) |
=IFERROR((A2/B2)*C2,0)→27
Try it with your data
Edit the grid or formula, then run it through a real spreadsheet engine — no signup.
Sample data — click any cell to edit
Runs server-side · free · no signup
Step by step
- 1Enter accounts receivable (AR) at period end in A2, total credit sales for the period in B2, and the number of days in the period in C2 (e.g. 30 for a month, 90 for a quarter, 365 for a year).
- 2In D2 enter the DSO formula: =IFERROR((A2/B2)*C2,0). IFERROR handles the case where credit sales are zero.
- 3For a trailing twelve-month DSO, use ending AR divided by average daily sales: =A2/(B2/365), where B2 holds annual credit sales.
- 4To track DSO month over month, add rows for each period and copy D2 down.
- 5Compare DSO against your standard payment terms (e.g. Net 30). DSO consistently above terms signals a collection problem worth investigating.
Tips
- Use ending AR for simplicity, or average AR ((prior period + current period) / 2) for smoother DSO when AR varies significantly month to month.
- Segment DSO by customer type or geography using SUMIF to pull filtered AR and sales before applying the formula — aggregate DSO can mask a small subset of slow-paying customers driving the number up.
- DSO trending upward over several periods is an early warning sign of credit risk or customer cash-flow problems, even if the absolute number looks acceptable.
Need it for your exact data?
Describe your columns in plain English and get the precise formula for your sheet, with the right Excel or Sheets syntax.
Frequently asked
Should I use total sales or only credit sales in the denominator?
Only credit sales (sales not paid immediately at point of sale). Including cash sales understates DSO because those transactions never create receivables.
What is a good DSO?
A rule of thumb is that DSO should not exceed 1.5× your payment terms. If your terms are Net 30, DSO above 45 days warrants attention. Industry benchmarks vary significantly.
How does DSO relate to the cash conversion cycle?
DSO is one component of the Cash Conversion Cycle: CCC = DIO (Days Inventory Outstanding) + DSO − DPO (Days Payable Outstanding). Reducing DSO directly shortens the CCC and improves cash flow.