What is term for average time it takes customers to pay?

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1186164

2026-05-07 02:30

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The term for the average time it takes customers to pay is called "Days Sales Outstanding" (DSO). DSO measures the average number of days that receivables remain outstanding before they are collected. It is an important metric for assessing a company's cash flow and efficiency in collecting payments from customers. A lower DSO indicates quicker payment collection, which is generally favorable for a business's liquidity.

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