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Days Sales Outstanding vs. Accounts Receivable Turnover

DSO is the average number of days it takes your company to collect payment after a sale has been made. Tracking cash flow and accounts receivable (AR) efficiency in retail supply chains is essential. It’s especially important when suppliers face frequent deductions from major retailers like Amazon, Walmart, and Target. Two key metrics to watch are Days Sales Outstanding (DSO) and Accounts Receivable Turnover (ART).

While they serve different purposes, DSO and ART both provide insight into how efficiently your company collects revenue. Retailer deductions, unauthorized chargebacks, shortages, and disputes can distort these numbers by delaying payments and inflating AR balances. Automation solutions like iNymbus help solve these issues.

This post explains what DSO and ART mean, how deductions impact them, and how suppliers can use automation to improve both.

What Is Days Sales Outstanding (DSO)?

DSO is the average number of days it takes your company to collect payment after a sale has been made.

Why It Matters:

A high DSO means it’s taking longer to collect payments. This could be due to billing mistakes, customer delays, or unresolved retailer deductions.

How Retail Deductions Inflate DSO:

Let’s say Walmart withholds payment on a shipment due to a short shipment or an invalid barcode. Even if your team submits a dispute, the amount remains outstanding. Multiply this across hundreds of invoices, and your DSO begins to skyrocket.

With iNymbus, deduction resolution is automated. That means faster processing, quicker payments, and improved DSO.

What Is Accounts Receivable Turnover (ART)?

ART shows how often your company collects its outstanding payments over a set period, usually a year or a quarter.

Why It Matters:

A high ART means you’re collecting quickly. A low ART suggests delayed or infrequent collections, often due to disputes.

Retail Deduction Impact:

If chargebacks from Amazon or returns from Target aren’t resolved, they stay in your receivables and lower your turnover ratio. Even if your team is billing correctly, the time-consuming process of manually disputing claims creates collection delays.

With iNymbus automation, claims are filed faster and follow-ups are automatic, helping your ART bounce back.

learn more : https://blog.inymbus.com/days-sales-outstanding-vs-accounts-receivable-turnover