DSO is the gap between doing the work and getting paid for it. Here is what it means, how to calculate it, and the levers that shrink it, so cash your firm has already earned arrives sooner.
Days sales outstanding (DSO) is the average number of days it takes a law firm to collect payment after sending an invoice. It measures how quickly billed work turns into cash. A lower DSO means the firm is paid faster and has healthier cash flow, so reducing it frees up money the firm has already earned.
Every invoice creates a waiting period. Work is done, the invoice goes out, and then the firm waits to be paid. DSO is the average length of that wait. The longer it runs, the more of the firm's earned money sits outside its bank account, and the more likely an invoice ages into something that never gets collected.
Illustrative. The gap represents time, not a specific number of days.
How DSO is calculated. A common approach: (Accounts receivable ÷ total billings) × days in the period. For a quarter, that is average AR divided by billings, times 90. The exact formula matters less than measuring it the same way every period so the trend is honest.
The clock does not start until the invoice goes out. Tightening billing cycles so work is billed promptly removes days from DSO before collections even begin.
Every extra step between a client wanting to pay and being able to pay adds delay. Easy, direct payment options shorten the wait.
Consistent, scheduled follow-up on outstanding invoices, focused on the highest-value accounts, collects faster than manual reminders sent when someone remembers.
DSO moves when the whole cycle tightens. Tracking it over time shows whether process changes are actually working.
Oddr compresses the entire invoice-to-cash cycle: it streamlines billing so invoices go out sooner, makes payment easier, and automates prioritized collections follow-up, all on top of a firm's existing system of record. Because DSO responds to the whole cycle rather than any single step, tightening all of them together is what moves the number.
See how Oddr compresses the invoice-to-cash cycle so your firm's DSO comes down and earned cash arrives sooner.
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