These helpful financial calculators will assist you in gauging the effectiveness of your credit and collection policies. Bookmark this link for future use.
Day Sales Outstanding Calculator
Day Sales Outstanding (DSO) is a measurement, in number of days, of the time it is taking to collect your accounts receivable. Day Sales Outstanding (DSO) can uncover the effectiveness of your credit and collection policy’s effectiveness over time. This version of a DSO calculator multiplies your current end of month receivables balance by 90 and divides that number by your total sales for the last 3 months. This tool is typically used monthly and is a good way to measure whether or not your current strategy is improving your cash-flow and bottom line. We have used 30 days as the number of days your customers are expected to pay therefore, your DSO should be as close to thirty days as possible.
Accounts Receivable Turnover
This calculator helps you to determine how quickly your invoices turning into actual money. Your accounts receivable turnover is calculated by dividing your total credit sales by the average of your accounts receivable. If your result is somewhere between 40 to 45, you’re in pretty good shape. But if the result is over 50, you have a lot of accounts (or a few very big accounts) that aren’t paying you on time, leading to a cash crunch.
Accounts receivable aging
This calculator will help you determine the percentage of seriously delinquent receivables. These numbers are calculated by taking the dollar value of all of your outstanding receivables from their respective 30-day periods, and dividing by the total value of all of the accounts in question. This calculation can be helpful for determining how quickly your accounts are typically monetized.
Days of inventory on hand
This calculator will determine how soon you would completely exhaust your inventory if you stopped ordering new merchandise today. This calculation determines your inventory turn rate by dividing the actual cost of your merchandise by 365, and then dividing the inventory on hand by the result.