The DSO Benchmark Report: How $6M+ Working Capital Sits Trapped in Your Receivables

Some numbers hit differently when you stop reading them in a spreadsheet and start seeing the patterns behind them.

PYMNTS says 62% of companies see DSO improve when they automate AR, yet over the last 5 years, DSO has increased by 6.6% on average.

What gives? Most CFOs already know automation helps. What they don't have is proof of where they stand against their peers. The "industry benchmark" data they're using? Old reports. Incomparable peer groups. A spreadsheet built in 2021.

We pulled this together to fix that.

Why DSO Still Matters (Even If It's Not the Whole Picture)

There are better metrics out there. Days delinquent. Cost to collect. Dispute resolution time. Payment behavior trends.

But DSO won't die: it's the one metric everyone already understands. The board knows it. CFOs track it. You say "we're 40 days behind industry leaders" and no one needs a glossary. Say "our average days late adjusted for dispute resolution complexity" and you're now giving a TED Talk.

DSO won't tell you what's broken. But it tells you that something is, and roughly how bad it is. That's where the real work starts.

We Looked at 1,948 U.S. B2B Companies

Bigger companies perform worse at receivables, not just more inconsistently. Companies in the $200M-$1B range had 18% wider DSO gaps than smaller peers AND the highest median DSO at 51.3 days. That's worse than both smaller companies (38.6 days) and larger companies (43.8 days). The median spread grows from 29 days to 34 as you scale. Most don't fix the mess. They just add headcount and hope it holds.

Mid-market companies are both slower AND more inconsistent at collections.

Same industry, wildly different outcomes. Manufacturing firms had a 32-day DSO spread. Same market, same suppliers. In tech, it's even worse: 44 days. That's $8.6M-$12.1M per $100M revenue sitting in receivables because one company handles collections better than another.

And these gaps stick. Same top and bottom performers, year after year.

Capital intensity amplifies DSO pain. Healthcare companies tie up 22.2% of revenue in working capital compared to Tech's 9.6%. While Healthcare shows smaller DSO spreads (36 days vs 44), poor DSO performance hits them much harder. When you're already capital-intensive, every extra day of DSO consumes more cash relative to revenue.

A Healthcare company performing worse than median DSO faces a compounded cash problem. Tech companies with lower working capital intensity can afford inefficiency longer, which is why they often have wider performance spreads.

Bottom line: DSO performance gaps consistently exceed 20-40 days within the same industries. Most CFOs have never actually quantified what this means for their cash position.

Why CFOs Should Care About DSO Benchmarking

Most teams glance at DSO once a quarter and move on. That's not nearly enough.

When you see performance spreads of 52 days in Banking or 20 in Basic Materials, that's not market conditions. It's operational discipline. The faster collectors aren't lucky. They just run tighter.

And inefficiency scales with size. A $50M company with loose processes is wasting $2M-$3M. A $500M one? Multiply that by 10.

Saying "60 days is normal in our industry" doesn't hold when your competitors are getting paid in 35. With the same customer base.

The Methodology Behind DSO Benchmarking

This analysis draws from the most recent 10-K filings of 1,948 U.S. B2B companies via the SEC's EDGAR database, with companies segmented into 9 industry groups based on billing models, capital intensity, and supply chain complexity. Each industry is further divided into 2-4 peer segments based on revenue, with DSO performance bands ensuring statistically significant comparisons of at least 12 companies per band.

Why does this methodology matter? Most industry benchmarks mix apples and oranges. A subscription software company operates completely differently from a project-based systems integrator, even though both get labeled "Technology." Our approach isolates these differences so the performance gaps you see represent real operational opportunities, not structural differences between business models.

We cleaned the data carefully - extreme outliers were removed to not skew the results, and suspicious data were removed. The result is a dataset specifically designed for operational benchmarking and cash opportunity sizing.

How to Use the Receivables Benchmark Report

Our comprehensive DSO benchmark overview shows performance across all major B2B industries at the 30,000-foot level. You'll see which industries maintain tighter collection cycles, where subscription revenue models create natural advantages, and how capital intensity affects working capital requirements.

The overview dashboard displays median DSO performance by industry and revenue band, plus cash conversion cycle context that explains why some industries run higher DSO by design. For CFOs evaluating acquisitions or market expansion, this provides essential context for due diligence and strategic planning.

Deep-Dive Analysis: Peer-Level Benchmarking

The detailed peer analysis breaks down companies within your industry based on key financial drivers - CapEx intensity, gross margins, and business model characteristics. This creates truly comparable peer groups and eliminates the "apples to oranges" problem that makes most industry benchmarking useless.

Within each peer segment, companies are ranked by DSO performance. This reveals the specific cash opportunities available by moving from the bottom-quartile to the top-quartile performance. The analysis includes statistical correlations between DSO and key financial metrics like quick ratio, free cash flow margin, and cash interest coverage.

Impact Calculator: Quantifying Cash Flow Opportunity

The interactive DSO benchmarking calculator translates benchmark data into specific financial projections for your company. Input your current Days Sales Outstanding and revenue, and the tool calculates cash release potential under three scenarios: reaching your industry's top-quartile performance, achieving median performance, or hitting Growfin's guaranteed 33% DSO reduction.

The calculator goes beyond simple cash release to show impact on key CFO metrics: interest savings based on your cost of capital, CapEx funding capacity, and free cash flow improvement. For companies evaluating receivables management investments, this provides the business case foundation.

Summary of Working Capital Performance Across Industries

Industrial & Manufacturing

Multi-tier supply chains create wide DSO performance gaps, tying up capital needed for equipment investments. The 31-day spread (68 to 37 days) translates to $8.6M cash release per $100M revenue for companies that systematically optimize receivables processes. Access the Industrial & Manufacturing DSO benchmarks.

Banking & Financial Services

Short billing cycles mask inefficiencies—manual processes create delays despite fee-based models' low DSO nature. Top performers achieve 20-day DSO while bottom quartile stretches to 72 days, representing $14.2M cash opportunity per $100M revenue. Access the Banking & Financial Services DSO benchmarks.

Basic Materials & Chemicals

Multi-tier supply chains and bulk shipments drive extended billing cycles, yet the 20-day performance gap (49 to 29 days) proves operational efficiency matters more than industry structure. Leading companies release $5.5M more cash per $100M revenue through systematic optimization. Access the Basic Materials & Chemicals DSO benchmarks.

Healthcare & Life Sciences

Insurance reimbursement cycles drive DSO variance, with regulatory complexity increasing bad debt exposure risk. The 36-day performance gap (78 to 42 days) represents $9.9M cash opportunity for healthcare businesses per $100M revenue through systematic dispute resolution and automated follow-up. Access the Healthcare & Life Sciences receivables benchmarks.

Energy, Utilities & Waste

Regulated billing provides predictability, but infrastructure operations still show 30-day DSO spreads (64 to 34 days). Top performers leverage automated processes to unlock $8.1M in working capital per $100M revenue while maintaining regulatory compliance. Get the in-depth Energy, Utilities & Waste industry DSO benchmarks.

Media, Entertainment & Advertising

Project-based and ad-sale billing models create natural DSO volatility, yet top performers maintain tight collection cycles. The 41-day performance gap (71 to 30 days) unlocks $11.4M per $100M revenue through automated workflows and client communication optimization. Access the Media, Entertainment & Advertising DSO benchmarks.

Technology, Software & IT Services

Subscription models promise predictable revenue, but manual processes still hinder cash flow predictability and growth. The 44-day performance gap (79 to 35 days) unlocks $12.1M per $100M revenue when automated billing and payment processing eliminate intervention points. Acces the in-depth Technology & Software indusry's DSO benchmarks.

Real Estate & Construction

Progress billing creates lumpy cash flows, yet top performers achieve dramatic DSO improvements via optimization. The 43-day spread (55 to 12 days) represents $11.9M cash opportunity per $100M revenue through structured payment schedules and milestone management. Access the DSO benchmarks for Real Estate & Construction industry.

Transportation & Logistics

Route-based and trip-based billing models create invoicing complexity, yet leading companies achieve efficient collection cycles. The 24-day performance gap (55 to 31 days) releases $6.6M per $100M revenue through automated data capture and streamlined approval processes. Access the receivables benchmarks for Transportation & Logistics industry.

What this Means for CFOs

The Liquidity Trap 

The mid-market liquidity trap is real and measurable. Companies in the $200M-$1B range not only show the highest median DSO at 51 days, but also the widest performance variance. They've outgrown the scrappy agility that keeps smaller companies' chaos manageable, but haven't yet built the process sophistication that enterprise companies rely on. This creates a double penalty: slower collections and less predictable cash flows.

Operational Design vs Industry Structure

Industry structure doesn't determine DSO outcomes; operational design does. Banking & Financial Services companies handle the most regulated, standardized transactions in B2B commerce, yet they show the widest performance gap at 52 days. Meanwhile, Basic Materials companies dealing with complex supply chains and bulk commodity transactions show only 20-day gaps. The difference isn't the inherent difficulty of the business model.

Opportunities within Working Capital Composition

Working capital composition reveals hidden cash optimization opportunities. Technology companies tie up only 9.6% of revenue in working capital but show 44-day DSO spreads worth $12.1M per $100M revenue. Healthcare companies with 22.2% working capital intensity show smaller 36-day gaps worth $9.9M. This suggests that asset-light industries have more untapped receivables optimization potential precisely because they haven't been forced to optimize by capital constraints.

Process Discipline vs Subscription Model 

The subscription revenue advantage only materializes with process discipline. Technology companies promise predictable revenue streams, yet many still operate with manual invoicing and receivables management that creates the same DSO volatility as project-based businesses. The companies that actually achieve subscription-model advantages have eliminated human intervention points, not just changed their billing frequency.

Predictability vs DSO

Cash flow predictability matters more than absolute DSO levels for strategic planning. A manufacturing company with consistent 55-day collections can plan more effectively than a media company with DSO that swings between 30-71 days quarterly. Treasury operations, credit facility utilization, and growth investment timing all depend more on cash flow predictability than speed.

From Operational Challenge to Strategic Advantage

Companies with superior DSO performance don't just collect faster - they operate more efficiently across their entire revenue cycle. Manual follow-up processes, fragmented dispute resolution, and poor customer segmentation create bottlenecks that extend well beyond collections.

Leading organizations address these challenges through integrated platforms that unify AR data across systems, automate workflow based on customer payment patterns, and provide real-time visibility into collection performance. The result isn't just proactive receivables management and faster and predictable cash collection, but improved customer relationships and reduced operational overhead.

Siloed data systems prevent comprehensive AR visibility across ERP, CRM, and billing platforms. Integration creates unified dashboards that enable intelligent prioritization and automated follow-up based on account history and risk profiles.

Manual collection processes rely on email-based follow-up without systematic prioritization. AI-driven workflows automate routine tasks while escalating complex situations to human intervention, improving both efficiency and customer experience.

Fragmented dispute resolution lacks structured workflows for tracking and resolving payment issues. Collaborative platforms streamline stakeholder communication and provide audit trails that accelerate resolution while maintaining customer relationships.

The reality: Companies implementing systematic receivables management typically achieve 20-35% Days Sales Outstanding reduction within 6-12 months, with cash flow improvements that persist long after implementation.

Discover Your Industry's Cash Flow Potential

The benchmark data provides the roadmap, but every CFO needs to understand where their company stands today and what's realistically achievable given their industry dynamics and business model.

Our interactive benchmark report and calculator quantifies the specific opportunity within your industry peer group, showing exactly how much cash you could release by moving to top-quartile DSO performance. Whether you're preparing for growth investments, reducing external financing requirements, or simply optimizing working capital efficiency, the data provides a clear starting point for strategic planning.

Explore the complete benchmark analysis and calculate your cash opportunity →

Methodology: Analysis based on 1,948 U.S. B2B companies with financials extracted from SEC 10-K filings. Industry segmentation considers billing models, capital intensity, and supply chain complexity. All metrics winsorized at appropriate percentiles to ensure statistical robustness. Full methodology available in the interactive report.

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