Download - Tips to Reduce DSO and Mantain Cash Flow
Tips To Reduce DSO & Manage Account
Receivables
PRESENTED BY TROVEWORKS
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• A Short Introduction• Tips to Reduce DSO• Contact Us
What is DSO?
DSO, or Days Sales Outstanding measures the
average number of days that it takes your
customers to pay their invoices. A high number
indicates slow payment, which can delay cash
from hitting your account. Try automated
accounts receivable solutions to manage cash
flow and reduce your DSO.
• Increase Visibility
Before you take any other steps, it’s
important to have a full and complete
picture of your receivables and payable.
For DSO, make sure you have reporting
practices in place that allow you to see
which customers tend to pay late, trace
any correlations that exist with your
sales practices, and discover internal
issues that might be causing delays.
Tips To Reduce DSO
2. Automate A/R Processes
Manual A/R processing is inefficient
and costly. By implementing
Receivables Automation, you can
improve cash flow while reducing your
operating costs and improving your
overall customer experience. A cloud-
based payment solution like
Troveworks can help you invoice your
customers instantly and make your
collections process easier
3. Offer More Payment Options
Another way you can quickly reduce
DSO is to make it easier for customers
to pay you by offering multiple payment
methods. This provides greater
flexibility for customers while helping
shift away from less convenient options
like paper checks. Accepting alternative
payment options can help your
organization stand out in an
increasingly convenience-driven world.
A good rule of thumb is that your DSO
should be within 20% of your stated
payment terms. If you’re within the right
range and find that your DSO is too long
you should consider gradually reducing
your payment period. If you find that the
percentage is significantly higher than it
should be it’s worth offering incentives
and/or charging penalties to motivate a
closer alignment.
4. Adjust Your Payment Terms
Another way to cut your DSO is to get
strategic about how you follow up with
customers about delayed payments.
Using intelligent automation features,
you can use payment software to stay
ahead of the monthly collections
process. This way customers can apply a
greater focus on getting delinquent
accounts back on track, while actually
decreasing the amount of time and effort
required to make it happen.
5. Personalized Collection Plans
The goal is to identify risky customers,
both current and new, and decide what
level of credit risk your organization is
willing to face. You should run thorough
credit checks on new customers, and
consider rejecting them if their established
credit record is worse than your
predetermined threshold. If your services
are in demand, it’s worth eliminating bad
players so that you can focus on
customers that help keep your DSO down.
6. Focus on Customer Credit Issues
Contact Information
WEBSITE ADDRESShttps://troveworks.com
EMAIL [email protected]
PHONE NUMBER(669) 244 4160