29 Mar 2015

Tips to manage your DSO (Days Sales Outstanding)

Days Sales Outstanding (DSO) is a key metric in many companies. With the cost of credit remaining tight and banks reducing credit lines, the ability to collect funds quickly is of paramount importance. Mailpost offers two compelling ways to reduce DSO.

  1. Invoice Queries. One of our customers was was amazed that they started receiving calls from corporate customers within ten minutes of emails being sent in order to reconcile statements, instead of waiting five days for the snail mail invoice to reach the accounts payable desk!
  2. Late payers. A large number of customers pay their invoices as late as possible. Utility companies offer various discount incentives to encourage Direct Debits and on-time payments, but there are still a large percentage that pay late, or by cheque. By inserting a payment button on the invoice or in the email itself, DSO can be reduced by up to 20% for that demographic of customer. Mailpost is fully integrated with payment solutions like DPS and POLi including generation of the payment links.

For a company with annual turnover of $150m and a line of credit costing 12.5%, reducing DSO by 1 day is worth $513,000. That’s worth a lot more than the stamp savings!

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