Why DSO matters for Indian SMEs
Days Sales Outstanding (DSO) measures how long it takes to collect payment after a sale. For Indian SMEs, high DSO means cash flow problems, difficulty paying vendors, and potential working capital shortages. The average DSO for Indian businesses is 45-60 days, but best-in-class companies manage under 30 days.
1. Invoice immediately after delivery
The clock on payment terms starts when the invoice is sent, not when goods are delivered. Many businesses lose days or weeks between delivery and invoicing. With ReadyBooks.ai, you can create and send invoices in under a minute, right from your phone or desktop.
2. Set clear payment terms upfront
Agree on payment terms before the first transaction. Common terms in India include Net 15, Net 30, or advance payment. Include terms clearly on every invoice — ReadyBooks.ai lets you set default terms per customer so you never forget.
3. Send automated payment reminders
Most late payments are not intentional — customers simply forget or the invoice gets buried. Automated reminders at 7 days, 3 days, and on the due date significantly improve collection rates. ReadyBooks.ai can send these automatically via email.
4. Offer multiple payment methods
Make it easy for customers to pay. Accept bank transfers, UPI, cheques, and online payments. The fewer barriers to payment, the faster you get paid.
5. Track and act on ageing reports
Review your ageing report weekly. Invoices in the 30+ day bucket need personal follow-up. ReadyBooks.ai categorises overdue invoices by 30, 60, and 90+ day buckets, and shows you exactly which customers need attention.
Measure your progress
Track your DSO monthly and set targets for improvement. Even reducing DSO by 5 days can have a significant impact on your working capital. ReadyBooks.ai calculates DSO automatically on your dashboard.