Days sales outstanding should be decreased to increase accounts receivable conversion.

Question

Quizplus · Accepted Answer

Days sales outstanding (DSO) is a measure of how long it takes a company to collect payment from its customers. A decrease in DSO means that a company is collecting payment more quickly, which in turn increases the accounts receivable conversion (i.e. the amount of receivables that are converted to cash). Therefore, decreasing DSO is a way to increase accounts receivable conversion.

Days Sales Outstanding Should Be Decreased to Increase Accounts Receivable