What is best possible DSO in SAP FI-AR - Accounts Receivable?

SAP Term: best possible DSO

• Component: FI-AR

• Component Name: Accounts Receivable

• Description: Days sales outstanding DSO that can be reached if payment is always made on the due date.

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• Key Concepts: 
  Best Possible DSO (Days Sales Outstanding) is a metric used to measure the average number of days it takes for a company to collect payments from its customers. It is calculated by dividing the total amount of Accounts Receivable (AR) by the total amount of credit sales for a given period, and then multiplying that number by the number of days in that period. 
  
  How to use it: 
  In SAP FI-AR Accounts Receivable, Best Possible DSO can be used to measure the effectiveness of a company’s credit and collection policies. It can also be used to identify areas where improvements can be made in order to reduce the amount of time it takes for customers to pay their invoices. 
  
  Tips & Tricks: 
  When calculating Best Possible DSO, it is important to ensure that all Accounts Receivable and credit sales are included in the calculation. Additionally, it is important to ensure that all invoices are accounted for in order to get an accurate picture of the company’s performance. 
  
  Related Information: 
  Best Possible DSO is closely related to other metrics such as Average Collection Period (ACP) and Days Payable Outstanding (DPO). ACP measures the average number of days it takes for a company to collect payments from its customers, while DPO measures the average number of days it takes for a company to pay its suppliers.