DSO Meaning Let’s start by defining what DSO means. Days Sales Outstanding (DSO) is the average number of days taken by a firm to collect payment from their customers after the completion of a sale. if I send an invoice of January 1st with a payment due date of January 31st and the customer ends…
Most businesses sell to their customers on credit. The items or services ordered by customers are delivered before any payment is made. Accounting-wise, we use an account called “Accounts Receivable” to track that a payment is due by the customer. Technically for every customer, we track the invoices that are sent with a set of…
Writing a collection letter to a customer can be scary. How to ask for money owed without coming off as rude and annoying? Direct and to the point: Customers don’t read long emails; so the amount and due date should be in bold and in the first sentence of your collection letter. I usually recommend…
A dunning letter is a reminder sent to the customer stating that an invoice was sent and it is past due. Dunning letters should always include references to the services rendered or product delivered. It should also include a copy of the invoice past due and multiple payment options. We recommend adding a phone number…
What is invoice factoring? When a company uses Invoice factoring, it sells some or all of your company’s outstanding invoices to a third party. For instance, if you have 100 invoices adding up to $44,000 in Accounts receivable, you can sell the invoices rights to a 3rd party for a percentage of the value of…