What is the 18-day DSO gap in accounts receivable?

The 18-day DSO (Days Sales Outstanding) gap refers to the significant performance difference between top-quartile companies and median organizations. The Hackett Group data shows top performers collect payments in 28 days, while the median organization takes 46 days.

What are the measurable benefits of using AI in accounts receivable collections?

The article highlights that organizations using AI see measurable results, including a 43% improvement in cash flow predictability and a 67% reduction in process costs per collection contact. Furthermore, 99% of AI users reported a reduction in their average DSO.

What are the most effective DSO reduction strategies?

Effective strategies to close the DSO gap include using AI for predictive analytics, automating cash application, and implementing strategic collections management. This involves segmenting customers by payment behavior and value, allowing teams to focus high-touch efforts on high-risk accounts.

How does closing the DSO gap impact working capital optimization?

Closing the DSO gap directly optimizes working capital by unlocking cash trapped in aged receivables. By collecting 18 days faster, companies improve cash flow, reduce the need for borrowing, and gain the flexibility to invest in growth.