Troubled with a high Daily Sales Outstanding? Here’s how Industry leaders are addressing this issue

1. Cash flow problems: A high DSO means that cash is tied up in accounts receivable, making it difficult for a business to pay its bills and invest in growth.
2. Increased risk of bad debt: The longer it takes to collect payment, the higher the risk of non-payment or bad debt.
3. Reduced profitability: When a business has a high DSO, it may need to borrow money to cover expenses, which can lead to increased interest payments and reduced profitability.
4. Strained customer relationships: Customers may become frustrated if they are constantly reminded about overdue payments, which can strain relationships and hurt future sales.
5. Inaccurate financial reporting: If accounts receivable are not managed properly, it can lead to inaccurate financial reporting and mismanagement of resources

A high DSO can impact several leaders within a company, from the CFO to the Sales Director/Manager, Accounts Receivable Manager, and COO. As such, it is important for businesses to take steps to reduce DSO and improve financial health, and here is how leaders are leveraging automation and tech to achieve better outcomes.

1. Invoicing: Automated invoicing can significantly reduce the time it takes to generate and send invoices, which can result in faster payment and a shorter DSO.
2. Payment processing: By automating payment processing, businesses can streamline the collection of payments and reduce the time it takes to receive payment.
3. Customer communication: Automated communication can help remind customers about payments that are due, reducing the risk of late payments.
4. Credit checks: By automating credit checks, businesses can quickly determine a customer’s creditworthiness, reducing the risk of bad debt and reducing the overall DSO.
5. Cash application: Automating the cash application process can help ensure that payments are accurately and efficiently applied to customer accounts, reducing the time it takes to clear invoices.
6. Collections: Automated collections processes can help businesses identify and prioritize delinquent accounts, allowing them to take swift action to collect overdue payments.

Write to us workato@purplflute.in so that we can share more about how we are working with Leaders to reduce their DSO with #Workato, a 5 time Gartner leader in iPAAS and Automation