Companies can unlock a lot of value by reducing their days sales outstanding. A lower days sales outstanding: –Frees up cash –Reduces financing costs by shortening the cash conversion cycle –Results in a higher collection rate Accounts receivable can be viewed as cash that is trapped on a company’s balance sheet. By reducing days sales outstanding, a company can free up that cash. The cash can then be used to: –Finance growth –Pay off debt –Invest in securities and earn a return –Make a distribution to shareholders –Improve liquidity for market shocks Remember, allowing a customer an additional day to pay their bill is no different than giving the customer an interest-free loan. 0:00 Introduction 0:17 Frees up cash 1:02 Shorter cash conversion cycle 2:29 Higher collection rate — Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is …
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