Considering DSO
Answer: Another reader wrote:
One measurement that I think is important to talk about is Past due DSO,
or Days Delinquent DSO. This is important because DSO is not directly controllable
by credit, but the Past Due DSO is more directly controlled by credit unless
your company is totally driven and controlled by sales. I believe that Days
Delinquent DSO is a better measure of a credit services department performance
than the more customary DSO. Where a lot of value comes in for this measurement
is if you do it by past due buckets. For example, if your Past Due DSO is
ten days, but eight of these days are in the 1 to 30 Past Due aging bucket,
then that tells a better story than if the days were spread across all of
the aging buckets. Please consider a white paper on measuring credit department
performance. Response: Good idea. I will start working on one.
|