From the course: S/4 Finance: Fiori Accounts Receivable Analytics
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Days sales outstanding (DSO) - SAP ERP Tutorial
From the course: S/4 Finance: Fiori Accounts Receivable Analytics
Days sales outstanding (DSO)
- [Instructor] For this final KPI, we're going to look at the tile called days sales outstanding. So this is a Fiori app that looks at the days sales outstanding KPI for the last 12 months and it's measured in the number of days. So as an Accounts Receivable Manager, you would like to review this KPI. And what it tells you is the average number of days it takes to receive payments from customers i.e how efficiently you're converting sales to cash. Maybe in this case, as well, only credit sales are taken into consideration. If people are paying by cash then they'll know terms to monitor. Now, days sales outstanding the basic calculation is total open receivables multiplied by 30 days, divided by total monthly sales. So this is the basic calculation, but one thing to bear in mind is that seasonality has a huge impact on this calculation. So in other words if sales are not consistent every month, and if customers don't…
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