DSO Calculator · Days Sales Outstanding

Calculate my DSO

Enter the values from your balance sheet and income statement to get your DSO and an instant rating.

Accounts Receivable (€)

Sales in Period (€)

Period

—

days

—

——

Get the full analysis by email?

What is DSO?

The DSO (Days Sales Outstanding), or average collection period, is a financial indicator that measures the average number of days your company takes to collect the cash from credit sales. The lower the DSO, the faster the cash comes in, and the healthier the finances.

A high DSO means the company is financing its customers with its own capital, putting pressure on working capital and potentially forcing recourse to unnecessary external financing.

DSO Formula DSO = (Accounts Receivable ÷ Sales in Period) × Number of Days

Example: AR = 120,000€ | Sales 90d = 600,000€
DSO = (120,000 ÷ 600,000) × 90 = 18 days

The notes to the financial statements and the balance sheet are the usual sources for this data. Alternatively, use open invoices divided by the last quarter's sales.

Sector benchmarks, Portugal

Compare your company's DSO against the typical values for your sector. Data based on Banco de Portugal publications and European trade-credit studies.

Sector	Typical DSO	Rating	Grade
Retail	20–35 days	Excellent	A
B2B Services	60–75 days	Acceptable	C
Construction	90–120 days	High	D
Public Sector (B2G)	90–150 days	Very high	E
Portugal average (SME)	67 days	Above the EU	D
Europe average (EU27)	45 days	Benchmark	C

DSO by sector, detailed analysis

Construction and public works have the highest DSO in Portugal, typically between 90 and 150 days. Structural causes include contracts with the State subject to DL 62/2013 (statutory maximum of 30 days for public entities, often ignored), retention guarantees (5-10% held until project completion) and long subcontracting chains.

112 daysaverage DSO, PT construction

€2.1Boverdue, PT public sector

30 daysstatutory maximum B2G

Most common solution: factoring of invoices on the State and large contractors. Rates are lower because the debtor is low-risk, even if the term is long.

B2B services (consulting, IT, marketing, accounting) have an average DSO of 60-75 days in Portugal, above the European average (45 days). The main issue is monthly post-service invoicing combined with 30-60 day payment terms, creating a structural gap between delivery and collection.

68 daysaverage DSO, PT B2B services

35%of service SMEs have DSO >75d

2-3%typical early-payment discount

Most common solution: early-payment discount (2% within 10 days) combined with selective factoring for long contracts or large customers.

Retail and distribution have the lowest DSO, 20-35 days, because most sales are cash or card. The risk here is DPO: large retailers often extend supplier payment terms to 60-90 days, putting pressure on the supply chain.

28 daysaverage DSO, PT retail

75 daystypical DPO, large retailers

-1.5xnegative working capital, normal in the sector

Most common solution: for retail suppliers, confirming offered by the large retailer. The supplier is paid earlier at a discount, the retailer keeps long terms.

How to reduce your company's DSO

A high DSO is not inevitable. There are practical, immediate strategies to speed up collections without harming the customer relationship.

Factoring

Advance the value of your invoices within 24-48 hours, regardless of the customer's payment term. It eliminates DSO operationally: the invoice is assigned and the cash is available immediately.

Learn more about factoring →

Early-payment discount

Offer a 1-2% discount to customers who pay within 10-15 days instead of 60-90. It's a good deal for the customer; for you it amounts to a financing cost far below bank credit.

Calculate financing cost →

Immediate invoicing

Issue the invoice at the moment of product delivery or service completion, not at month-end. Every day of invoicing delay adds directly to DSO, and to the cash tied up in receivables.

Calculate late-payment interest →

Frequently asked questions about DSO

Does DSO include customers whose invoices are not yet due?

Yes. DSO calculated using the accounts-receivable method includes all open invoices, whether overdue or not. So even a company with no defaults can have a high DSO if its contractual terms are long. For a more precise analysis, compare DSO against the average contractual term granted.

What is the difference between DSO and average collection period?

They are practically synonyms. In Portugal, the indicator is often called PMR (Prazo Médio de Recebimento) in financial statements and Banco de Portugal analyses. Internationally, the term DSO (Days Sales Outstanding) is more common. The calculation formula is identical.

Is a low DSO always good?

In most cases, yes, it means the company gets paid quickly and has less capital tied up. However, an exceptionally low DSO can indicate that the company is granting payment terms that are too short, which may hurt commercial competitiveness against rivals offering more favourable conditions. The ideal balance depends on the sector and the company's strategy.

Advance your invoices with factoring

Reduce your DSO to zero operationally. Receive the value of your invoices within 24-48 hours and free up the capital tied up in receivables. No personal guarantees, no red tape.

Request access → Talk to a specialist →

Related calculators

See all tools →