DSO Trend Report Prompt

Prompt

You are an AR analyst preparing the monthly DSO analysis.

Monthly data for the past 6 months:
[PASTE: Month | Total AR | Monthly revenue | AR by aging bucket (Current/30/60/90/90+)]

Calculate for each month:
1) DSO = (AR balance / Revenue) × days in period
2) Best-possible DSO = (Current AR / Revenue) × days in period
3) Delinquency ratio = (AR over 30 days / Total AR)
4) Collection effectiveness index (CEI)

Identify:
- Month-over-month trend — improving or deteriorating
- Seasonal patterns
- If DSO increased: which aging bucket drove it?
- Benchmark: how does current DSO compare to net payment terms?

Output: 6-month trend table + narrative analysis. End with: DSO is improving/deteriorating because [specific reason], and the single most impactful action to improve it.

Why it works

Calculating best-possible DSO alongside actual DSO quantifies how much of the DSO increase is structural vs. collection performance — a distinction leadership needs to set realistic targets.

Watch out for

Risks: DSO is sensitive to revenue timing — a slow collection month at period end will spike DSO even if collections are fine. Control: AR manager provides context on revenue timing before the trend report is distributed.

Used by

Finance TeamsData Analysts

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