AR & DSO Discipline — Get Paid Faster

Overview

Days Sales Outstanding (DSO) is the average time to collect after a sale. For any business that invoices, uncollected receivables are cash you earned but can't use — and late payment is the quiet killer of otherwise healthy SMBs. Getting paid faster is usually the cheapest source of cash a founder has: no dilution, no debt, just discipline and better terms.

The Process

1. Measure DSO and aging — average collection time + a bucketed aging report (0–30, 31–60, 61–90, 90+).
2. Invoice instantly and correctly — same-day, clear terms, right contact; delays compound. Gate: invoicing days after delivery silently adds days to DSO.
3. Shift terms upstream — deposits, milestones, upfront, autopay/card-on-file; reduce net terms where you can.
4. Systematize follow-up — automated reminders before and after due date, escalating cadence (pairs with an AR/AP operator agent). Gate: ad-hoc, emotional chasing = inconsistent collections; make it a scheduled sequence.
5. Make paying easy — online payment, multiple methods, one click.
6. Enforce consequences — late fees, work-stop, or credit holds for chronic offenders; fire unprofitable late-payers.

When to Use

• Cash tight while revenue looks fine
• Growing overdue/aged receivables
• Service/B2B businesses on net terms