Glossary · Funding
What is DSO
Also called: days sales outstanding.
Definition
Days sales outstanding: the average number of days between invoicing a client and being paid. Every extra day is cash you have to fund.
Applies to: US and UK · Reviewed by James Doyle
In practice
Contract staffing typically sees 35 to 60 day DSO depending on sector. Healthcare systems and large enterprises sit at the slow end; SMEs and tech scale-ups are usually faster.
DSO is partly operational. Late timesheets, wrong PO numbers and missed billing portals add days that no funder will absorb for free.
Related terms
Cash conversion cycle
The total time between paying a contractor and collecting the matching client payment. In contract staffing it is commonly around 52 days.
ReadWorking capital
The cash an agency must hold to pay contractors before clients pay invoices. It is the real startup cost of a contract staffing business.
ReadBad debt
Invoiced revenue that will never be collected. In contract staffing it is doubly painful because the contractor has already been paid.
Read
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