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Accounts Receivable Turnover

Which do you use more often/find more value in analyzing? A/R Turnover DSO DDSO

Answers

Topic Expert
Keith Perry
Title: Consulting CFO and Business Operations A..
Company: Growth Accelerator
(Consulting CFO and Business Operations Advisor, Growth Accelerator) |

Wayne,

I'm old fashioned. DDSO just gets marked against my reserve for delinquents.
A/R turns, unless you fiddle it, needs help. In any case it isn't always helpful in explaining to management.
DSO tells the story at its most basic, and then dig for details from there.

Cheers,

KP

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

DSO-using the sales deduction method (i.e. at 9/30, the first 30 days is represented by Sept sales, if any AR balance remains, deduct Aug sales=30 days, etc.)

Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

DSO is still best in my mind. You can always fine tune the calc, but we just use one month of activity to measure against. I have used the countback methodology in the past, which is very exact. I prefer that, but if you have good working capital management, this is just a look in the rearview mirror

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