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DSO Demystified: An Informative Guide to Days Sales Outstanding for Construction Business Owners

In the construction industry, efficient cash flow management is crucial for success. Days Sales Outstanding (DSO) is a powerful metric that can help you stay on top of it. Understanding Days Sales Outstanding (DSO) can be a game-changer for optimizing cash flow management.

This blog post will dive into the top 10 questions related to DSO in the construction industry. So, grab a cup of coffee and join us on this journey to optimize your cash flow. And don't worry, we have got your back - CCA, a bookkeeping services firm specializing in Sage 100 Contractor, is here to help you every step of the way!

Table of Content:

  1. What Is DSO?

  2. Why should you care about DSO in construction?

  3. How does DSO differ between industries?

  4. DSO formula

  5. What is a good DSO for construction companies?

  6. Tips to lower DSO

  7. DSO vs CEI

  8. How technology can help construction businesses to manage their DSO?

  9. The impact of contracts and payment terms: on DSO

  10. How CCA and Sage 100 Contractor make DSO management a breeze

1. What Is DSO?

What is dso?

Days sales outstanding is a critical financial metric. It measures the average number of days it takes for your company to collect payment after services are performed on credit. The lower the DSO, the more quickly payments are collected. The higher the DSO, the longer the firm waits for its money.

2. Why Should You Care About DSO in Construction?