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How does calculating Best Possible DSO help me to measure the effectiveness of my department's collection efforts?

Answer: By itself it does not accomplish this function. However, the formula for calculating Days Delinquent Sales Outstanding [DDSO] is: DSO - Best Possible DSO = DDSO. Therefore, by calculating the Best Possible DSO you are able to arrive at your department's DDSO...and it is widely believed that while there are any number of factors that prevent the credit department from controlling DSO there are far fewer limitations on the credit department's ability to manage DDSO and therefore that DDSO is a useful tool in measuring the effectiveness of your department's collection efforts.

 
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