Capsule 002: DSO & Working Capital Benchmark

Your DSO is 52 days. Is that a crisis or completely normal? Most operators genuinely cannot say — and that is the whole problem. Days sales outstanding is the gap between issuing an invoice and the cash arriving, and it is one of the largest sources of capital most small businesses already own and cannot reach. But the number on its own tells you nothing, because almost everyone measures it against a textbook thirty-day figure that has nothing to do with their sector. Meanwhile the drift is slow and silent: a couple of days a quarter that never trips an alarm, until a year has passed and it is material.

This Capsule gives you the benchmark that makes the number mean something. Real DSO benchmarks are sector-specific, and the spread is enormous: e-commerce collects in under a week, B2B professional services run 40 to 60 days, construction runs 60 to 90. Seventy-five days is sector norm for a builder and structural failure for a retailer — identical number, opposite meaning. You get the full twelve-sector map built into a tracker that calculates your live DSO, places you against your band, and quantifies the gap between where you are and what is actually achievable.

Then you close it. The gap has a cause — invoices going unchased, customers who have to leave your invoice to log into their bank, or a few structurally late accounts you cannot speed up — and each cause has a different lever. Match them correctly and you release capital you already own. The worked example runs throughout: an agency on £1.2m turnover compressing DSO from 52 days to 41 in a single quarter, releasing roughly £36,000 — using tooling that costs under £100 a month, and without touching invoice finance. Reaching for finance when the problem was chasing is the expensive mistake this Capsule exists to prevent.