Glossary
Days Sales Outstanding
The average number of days it takes an agency to collect premium after invoicing, used as a single-number measure of collection efficiency.
DSO divides outstanding receivables by revenue over a period and multiplies by the days in it. Rising DSO means money is arriving more slowly, which shows up as cash pressure long before it shows up as bad debt.
For agencies it is best read against the remittance cycle rather than in isolation. DSO comfortably shorter than the remittance deadline means client money funds carrier payments; DSO longer than it means the agency does.
See also
- Accounts Receivable Aging — A report grouping outstanding client balances by how long they have been unpaid, typically in 30, 60, 90 and 120-day buc…
- Remittance — The payment an agency sends a carrier for premiums it has collected on the carrier's behalf, net of the commission it re…
- Write-Off — The accounting removal of a receivable judged uncollectible, recognising the loss and clearing the balance from the ledg…