The Days Sales Uncollected (DSU) Ratio Calculator helps businesses measure how long it takes to collect outstanding customer payments after sales are made. It is a critical financial metric that indicates the efficiency of a company’s accounts receivable collection process.
A lower DSU means the company collects payments quickly, improving cash flow. A higher DSU suggests customers take longer to pay, which may indicate collection inefficiencies or overly lenient credit policies. The Days Sales Uncollected Ratio is widely used in financial planning, cash flow management, and business analytics.
Formula for Days Sales Uncollected Ratio Calculator
The formula to calculate Days Sales Uncollected (DSU) is:
Days Sales Uncollected (DSU) = (Accounts Receivable / Net Sales) × Number of Days in Period
Where:
- Accounts Receivable = The total amount of outstanding customer payments
- Net Sales = The total revenue from sales during the period (excluding returns and allowances)
- Number of Days in Period = The timeframe for calculation (365 days for annual, 90 days for quarterly, or 30 days for monthly)
This formula helps businesses determine how efficiently they are converting sales into actual cash inflows.
Days Sales Uncollected Reference Table
To simplify calculations, here’s a reference table showing estimated DSU values based on different accounts receivable and sales amounts:
| Accounts Receivable | Net Sales | Number of Days in Period | Estimated DSU |
|---|---|---|---|
| $50,000 | $250,000 | 365 | 73 days |
| $75,000 | $500,000 | 365 | 54.75 days |
| $100,000 | $1,000,000 | 365 | 36.5 days |
| $30,000 | $200,000 | 90 | 13.5 days |
| $40,000 | $600,000 | 90 | 6 days |
| $20,000 | $500,000 | 30 | 1.2 days |
This table helps businesses quickly estimate their Days Sales Uncollected without manual calculations.
Example of Days Sales Uncollected Ratio Calculator
Let’s assume a company has $120,000 in accounts receivable, with $900,000 in net sales for the year (365 days).
Using the formula:
Days Sales Uncollected (DSU) = (120,000 / 900,000) × 365
Days Sales Uncollected (DSU) = 48.67 days
This means that, on average, it takes the company 49 days to collect payments from its customers.
Most Common FAQs
DSU helps businesses understand how quickly they convert sales into cash. A lower DSU improves cash flow, while a higher DSU may indicate slow collection processes or lenient credit policies.
To lower DSU, businesses can:
Enforce stricter credit policies
Offer early payment incentives
Send timely payment reminders
Automate their accounts receivable process
Not always. Some industries have naturally longer payment cycles due to contractual terms. However, a consistently high DSU may signal inefficiencies in collection efforts or excessive reliance on credit sales.