Days Sales Outstanding (DSO)
Days Sales Outstanding is a company’s average collection period. A low number of days indicate that the company collects its outstanding receivables quickly. The DSO figure is an index of the relationship between outstanding receivables and sales achieved over a given period. This is a critical consideration for staffing firms that are required (by law in some countries) to pay employees on a frequent basis (normally weekly) while receiving payment from clients could take significant amounts of time. In Europe, DSO is more commonly referred to as Debtor Days.
Source: Staffing Industry Analysts