Practical Guide: Reducing Your Payment Terms (DSO) in 2026

In a context where cash flow is becoming a company's most strategic asset, mastering your DSO (Days Sales Outstanding) is no longer optional. For financial directors, it has become the number one lever to quickly generate cash without modifying the commercial strategy.

In this practical guide, you will discover:

• How to calculate and interpret your DSO
• The 5 main causes of payment delays
• 5 concrete strategies to reduce your DSO by 40%
• A real client case with quantified results
• Tools to automate your collections

Understanding Your DSO: Beyond the Simple Formula

The calculation is: (Accounts Receivable ÷ Credit Sales) × Number of Days. But this ratio reveals much more than just a delay. It maps the efficiency of your entire invoicing and collection chain.

Concrete example: For a company generating €100K in monthly revenue, going from 60 to 40 days DSO immediately frees up €66K in available cash flow.

What Your DSO Really Reveals

A controlled DSO reflects a well-oiled commercial and administrative machine: fast invoicing, smooth payment process, proactive reminder management. Conversely, a drifting DSO signals operational friction that costs dearly.

Benchmark: Where Do You Stand Compared to the Market?

Standards vary considerably depending on your business model:

B2B SaaS Sector:

• Market standard: 45 to 60 days
• Top performers: less than 25 days

B2B Professional Services:

• Market standard: 60 to 90 days
• Top performers: less than 45 days

Complex Sales Cycles:

• Market standard: 90 to 120 days
• Top performers: less than 60 days

Diagnosis: The 5 Real Reasons for Payment Delays

Here are the root causes identified among our clients:

1. Poor Invoicing Quality

A missing or incorrect purchase order reference blocks the entire validation chain on the client side. The problem isn't with the client, it's your process.

2. Non-Existent Reminder Architecture

Without a structured system, reminders depend on your teams' available time. Result: some clients are never reminded, others are reminded chaotically.

3. Friction at Payment Time

If your client has to log into their banking portal, find your bank details, manually enter information... you lose precious days.

4. Poorly Orchestrated Disputes

A simple disagreement over an invoice line can paralyze the entire payment for weeks if no one actively handles it.

5. Technological Silos

When your CRM, ERP, and reminder tools don't communicate, information is lost and delays increase.

5 Operational Actions to Reduce Your DSO

Action 1: Accelerate Invoice Creation

The problem: The clock starts at the end of your service, not when you find time to invoice.
The solution: Directly connect your business tools to your invoicing system to trigger automatic issuance as soon as a project is delivered or a milestone validated.
Recommended tools: Pennylane, Sage, QuickBooks integrations with your project management tools.

Action 2: Orchestrate Your Reminders

The problem: All reminders are the same, regardless of client profile.
The solution: Create intelligent sequences that adjust to payment behavior. A good payer who is 5 days late deserves a different approach than a repeat bad payer.
Implementation: Segment your clients by payment history and adapt tone and frequency.

Action 3: Eliminate Payment Obstacles

The problem: Complex payment process = extended delays.
The solution: Set up a customer portal where payment is done in three clicks maximum. Credit card, instant transfer, direct debit: the more options you offer, the faster you get paid.
Measured impact: Average reduction of 7 to 12 days on DSO.

Action 4: Transform Promises into Forecasts

The problem: Payment commitments get lost in emails.
The solution: AI technologies can now automatically extract payment promises ("we will pay next Thursday") from your emails and consolidate them into your forecasting.
Benefit: Visibility on future collections to better manage your cash flow.

Action 5: Outsource Dispute Handling

The problem: Disputes drag on without a clear owner.
The solution: Assign a responsible person and work with a collection expert solution.
Result: Rapid identification of recurring blocking points.

The 5 KPIs to Track to Manage Your DSO

1. Consolidated DSO

Your flagship indicator of overall performance. Track weekly.

2. Aging of Receivables

The 0-30d / 30-60d / 60-90d / +90d breakdown reveals where your problems are concentrated.

3. Cash Flow Forecast Based on Commitments

Your collection forecasts for the next 30-60-90 days.

4. Invoice Issuance Delay

The delay between end of service and invoice issuance (often neglected but critical).

5. Dispute Resolution Rate

How long to close a dispute on average and what recovery rate.

Why Act Now: The Technological Momentum

Several factors converge to make 2026 the ideal year to rethink your accounts receivable management:

• Generative AI: Automates 80% of repetitive collection tasks
• Mature Connectors: Stable APIs to major ERPs and accounting software
• Economic Context: Imposes tight working capital management on all companies

Implementation Guide: 4 Practical Tips

1. On Early Payment Discounts

Only offer them if your DSO exceeds 45 days, and limit them to 1-2%. Beyond that, you sacrifice too much margin.

2. Pre-Invoicing Validation

Systematically confirm purchase order references and specific payment terms before issuing. This avoids 90% of subsequent blockages.

3. Management Cadence

Analyze your DSO weekly, not monthly. Responsiveness makes all the difference.

4. Alert Threshold

As soon as 10% of your outstanding exceeds 60 days, trigger a thorough review of your processes.

How Cleavr Helps You Reduce Your DSO

Complete Automation

• Native connection to your tool stack (Pennylane, Sellsy, Chargebee...)
• Multi-channel reminders with bailiff stamps
• Automatic matching upon payment receipt

Cleavr Results

• Recover 5x better than traditional collection agencies by combining Data/AI/bailiffs
• Protect your customer relationship and brand image: 90% debtor satisfaction
• As soon as payment is made, receive the money at D+1

FAQ: Frequently Asked Questions About DSO

What is a good DSO for my industry?

For B2B SaaS: aim for less than 30 days. For professional services: less than 45 days. For enterprise clients: less than 60 days.

How do I calculate my current DSO?

Formula: (Accounts Receivable ÷ Credit Sales) × Number of Days. Use your end-of-period receivables and sales for the same period.

How long does it take to significantly reduce DSO?

With the right tools, you can observe results in 60-90 days.

Should I offer early payment discounts?

Only if your DSO exceeds 45 days. Limit the discount to 1-2% maximum to avoid sacrificing too much margin.

What is the impact of a high DSO on my cash flow?

Each day of DSO represents immobilized cash. For €100K monthly revenue, 20 days of DSO = €66K tied up.

Ready to reduce your DSO and unpaid invoices? Discover how Cleavr automates your collection and frees up your cash flow.