The One Number That Could Save Your Business

Your DSO reveals how long you wait to get paid. Track it, improve it, and watch your cash flow (and sanity) improve— I'll show you how.

A few years into my business, I had one of those “how did I not know this?” moments.

I discovered there was a simple way to measure how long it takes to collect money after we send an invoice. It’s called DSO — Days Sales Outstanding. At the time, we were waiting way too long to get paid. I didn’t even realize how bad it was until we started tracking it.

Once we began to focus on it, it actually became kind of fun. We gamified it. Our team got intentional about driving that number down, little by little. And we made real progress. Not overnight, but over time we shaved a lot of days off our DSO — and let me tell you — life got a lot better.

Not just in a practical, financial sense. Emotionally, too. Fewer sleepless nights wondering how we were going to make payroll or cover bills. The stress went way down, and the control over our cash went way up.

If you’re not tracking your DSO yet, start today. It’s one of the most helpful metrics in your business — and one that too many restoration owners ignore until it becomes a serious problem.

So what is DSO, and how do you calculate it?

DSO tells you the average number of days it takes to collect payment after a sale is made. You don’t need to be a CFO to track this. It’s a simple formula:

DSO = (Accounts Receivable ÷ Total Credit Sales) × Number of Days

Let’s say your receivables are $325,000 and your monthly sales were $265,000.

DSO = ($325,000 ÷ $265,000) × 30 = 36.8
So your DSO is roughly 37 days.

That means you’re waiting, on average, 37 days to get paid for the work you’re doing today.

Now do this every month. Track it. Talk about it with your team. Set a goal to reduce it. You’ll be amazed how much clarity it brings — and how much it improves your cash flow.

Here’s the bottom line:

Improving your DSO puts more cash in your bank, faster.
And a healthy bank balance = a healthier business (and a healthier owner).
Get focused on DSO, and I promise — you’ll sleep better at night.