METHOD & GUIDANCE
How this calculation works
Enter figures from the same period and on a consistent VAT-inclusive or VAT-exclusive basis. Tool IQ recalculates every output immediately; nothing you enter is saved or sent to us.
How to use the result
Compare DSO over consistent periods and against contractual payment terms, then quantify the cash that could be released by reaching a realistic target.
Worked example
The calculator averages opening and closing receivables, divides by credit sales and scales the result to the number of days in the period.
Common mistakes
- Including cash sales in the denominator.
- Using an end balance when the period is highly seasonal.
- Comparing a monthly balance with annual sales.
Frequently asked questions
Is this calculator free?
Yes. It requires no account and stores no calculation inputs.
Can I use the answer for a formal filing?
No. It is a planning estimate, not accounting, tax, legal or investment advice. Confirm material decisions with a qualified professional.
Should I include VAT?
Use a consistent basis throughout. Businesses that recover input tax commonly model net figures; consumer-facing prices are often considered gross.
Continue the decision
- Cash Runway Calculator — Estimate how many months your available cash will last.
- Revenue Growth Calculator — Measure growth and project a future revenue scenario.
Method reviewed 26 July 2026. Figures are illustrative and calculated locally in your browser.