What's the difference between an outstanding balance and an overdue balance?

An outstanding balance includes all unpaid invoices regardless of due date, while an overdue balance only includes invoices past their payment due date. All overdue balances are outstanding balances, but not all outstanding balances are overdue.

How do outstanding balances affect cash forecasting?

Outstanding balances form a key input for cash forecasting, as they represent expected future cash inflows. Accurate tracking of these balances and their aging helps finance teams predict when cash will be available for operations and investments.

What is the relationship between outstanding balances and DSO?

Days Sales Outstanding (DSO) measures how quickly a company collects its outstanding balances. Higher outstanding balances typically correlate with higher DSO, indicating slower collection of accounts receivable.