About the Accounts Receivable Calculator
What is the Accounts Receivable Calculator?
Days sales outstanding (DSO) is the average number of days customers take to pay. It is the most direct measure of how well a business collects its dues.
Enter credit sales and opening and closing receivables. The calculator shows DSO, the receivables turnover, how far DSO exceeds your credit terms and the cash you would release by collecting 10 days faster.
How to use the Accounts Receivable Calculator
- Credit Sales for the Period (₹) (sample: 1,20,00,000)
- Opening Receivables (₹) (sample: 18,00,000)
- Closing Receivables (₹) (sample: 22,00,000)
- Days in the Period (sample: 365)
- Credit Terms Offered (days) (sample: 45)
- Press Calculate Receivables Turnover (results also refresh as you type). The result card shows the Days Sales Outstanding (DSO), along with Receivables turnover, Average receivables, Days beyond your credit terms and Cash freed by collecting 10 days faster.
Formula used
DSO = Average receivables ÷ Credit sales × Days in the period
- Receivables turnover = credit sales ÷ average receivables
Buyers must pay registered micro and small enterprise suppliers within 45 days under the MSMED Act.
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Credit Sales for the Period (₹) | 1,20,00,000 |
| Opening Receivables (₹) | 18,00,000 |
| Closing Receivables (₹) | 22,00,000 |
| Days in the Period | 365 |
| Credit Terms Offered (days) | 45 |
| Result | Value |
|---|---|
| Days Sales Outstanding (DSO) | 60.8 days |
| Receivables turnover | 6× |
| Average receivables | ₹20,00,000 |
| Days beyond your credit terms | 15.8 days |
| Cash freed by collecting 10 days faster | ₹3,28,767 |
Tips for using the Accounts Receivable Calculator
- Send invoices the same day goods ship, and follow up before the due date, not after.
- Offer a small early-payment discount if your cost of funds is higher.
- For MSME dues, buyers lose the tax deduction if they pay beyond 45 days (Section 43B(h)).