Cash Flow & Collections
DSO: The One Collections Number Every Bolivian Business Owner Should Track
You know your sales. You probably know your margin. But do you know how many days, on average, it takes to turn a sale into money in the bank? That number decides whether December is comfortable or a scramble.
By Contably · September 28, 2026 · 7 min read
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Ask a Bolivian business owner how collections are going and you'll usually get an impression: "fine", "a bit slow", "the usual clients are late". Impressions don't show you whether things are getting better or worse. Days Sales Outstanding (DSO) is the number that does.
What DSO measures
DSO is the average number of days between issuing an invoice and getting paid. It turns your whole receivables ledger into one number you can track month by month.
The formula
DSO = (Accounts receivable ÷ Credit sales for the period) × Days in the period.
Use credit sales only; cash sales are collected on day zero and make the number look better than it is. A 90-day period smooths out monthly swings.
A worked example
A Santa Cruz distributor has Bs. 180,000 in open receivables today. Its credit sales over the last 90 days were Bs. 270,000.
Accounts receivable todayBs. 180,000
Credit sales, last 90 daysBs. 270,000
Average credit sales per dayBs. 3,000
DSO = 180,000 ÷ 270,000 × 9060 days
The distributor offers 30-day terms. A DSO of 60 means clients are, on average, taking twice as long as agreed.
Why every day is worth money
Each day you cut from DSO frees one day of credit sales in cash. For this distributor, that's Bs. 3,000 per day.
DSO from 60 to 50 days+ Bs. 30,000 cash
DSO from 60 to 45 days+ Bs. 45,000 cash
DSO from 60 to 35 days+ Bs. 75,000 cash
That's cash you have already earned and already paid IVA and IT on. Getting it in costs nothing, unlike a bank loan. And the timing matters: October and November are when you build the cushion for aguinaldo on December 20.
How to read your number
- Compare it with your terms, not with other businesses. A DSO up to about 1.3 times your standard terms is healthy. Twice your terms is a process problem.
- Watch the trend. A DSO rising for three months in a row is an early warning, often weeks before you feel the cash squeeze.
- Break it down by client. The average often hides one or two large accounts dragging the whole number up. Fixing those two is usually the fastest win.
- Pair it with an aging report. DSO tells you how long; aging (0–30, 31–60, 61–90, 90+) tells you where. Anything past 90 days needs a decision, not another reminder.
Five levers that bring DSO down
1
Invoice on delivery, not at month-endEvery day between delivery and invoice is a day added to DSO before the clock has even started. With online SFE invoicing, there's no reason to batch.
2
Put the due date on every invoiceAn invoice without a date is paid when convenient. A date turns "when you can" into a commitment. See our guide to
credit terms that get you paid.
3
Remind before the due dateA friendly reminder three days before the due date catches invoices that are sitting on the wrong desk while there is still time to pay on time.
4
Make paying easyPut a QR payment code or bank details on every invoice and reminder. Every extra step a client has to take adds days.
5
Stop supplying seriously overdue accountsContinuing to deliver to a client 60 days past due tells them your terms are optional. A clear hold rule protects both DSO and your exposure.
Start this week: calculate your DSO today, write it down, and recalculate on the first of every month. You don't need software to begin. You need the same formula, the same period, and the habit of checking it.
How Contably helps: Contably calculates DSO automatically from your SFE invoices and payments, shows it by client alongside your aging report, and runs the reminder sequence before and after each due date. You see the trend without building a spreadsheet, and the reminders go out without anyone remembering to send them.
See your DSO in real time
Contably tracks every invoice from issue to payment and chases automatically, so your DSO goes down and your cash goes up. Try it free for 30 days.
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