- Accelerate cash receipts from customers with a professional collection process.
The DSO and the overdue invoices / accounts receivable ratio are used to measure your performance in this crucial sector for any business.
This goal is embodied in reducing your working capital requirement (WCR) which you can see on the balance sheet of your company.
- Avoid unpaid invoices from customers.
This objective is particularly important as bad debts impact your company's profitability and net result. The bad debts are materialized in the profit and loss statement (losses or provisions for doubtful debts) and in the balance sheet. The net result is an increase (if positive) or decrease (if negative) in the equity of the company.
Bad debts in My DSO Manager
The collection process of My DSO Manager allows you to identify receivables that cannot be collected due to the insolvency of customer or other reasons.
A specific status and a comment are applied to the invoices concerned.
Then, you just need to do an extraction of items that are qualified with this status to perform your bad debt review. See the demo.
Bad debts ratio is calculated as follows
Bad debts for the period*
+ Accruals for doubtful and old debts for the period
- Recovery of accruals for doubtful and old debts for the period
/ Turnover for the period.
* This period may correspond to a month, quarter or year depending on your company.