Free tool
DSO / DPO / CCC Calculator
The three numbers every finance team watches. Plug in AR, AP, COGS, revenue and inventory; get DSO, DPO, DIO and the cash conversion cycle, with industry benchmarks.
Receivables (DSO)
Payables (DPO) & inventory (DIO)
Leave blank for service businesses with no inventory.
Days sales outstanding
Days payable outstanding
Days inventory outstanding
Cash conversion cycle
Industry benchmarks (India)
| Industry | DSO | DPO | CCC |
|---|---|---|---|
| IT Services | 45–60d | 30–45d | 15–30d |
| Manufacturing | 60–90d | 45–60d | 30–60d |
| Retail | 5–15d | 30–45d | -10–10d |
| Pharma | 80–120d | 60–90d | 40–80d |
| FMCG | 30–45d | 40–60d | -5–15d |
A worked example, end to end
Scenario
A mid-market IT services firm. Annual revenue ₹100 Cr, COGS ₹60 Cr. AR ₹25 Cr, AP ₹15 Cr, Inventory ₹0.5 Cr.
Computation (annual, 365 days)
- DSO. (₹25 Cr / ₹100 Cr) × 365 = 91.3 days.
- DPO. (₹15 Cr / ₹60 Cr) × 365 = 91.3 days.
- DIO. (₹0.5 Cr / ₹60 Cr) × 365 = 3 days.
- CCC. 91.3 + 3 − 91.3 = 3 days.
- Benchmark check. IT services range is 15-30 days CCC; this firm is in good shape.
- DSO is the lever. Cutting DSO by 10 days frees ₹2.74 Cr in cash permanently.
Free download
CFO working capital playbook (PDF).
21 levers to compress the cash conversion cycle, ranked by impact and effort. Includes a benchmark table for 10 industries, a board-ready monthly working capital report template, and a DSO improvement roadmap.
How the metrics work
DSO = (Accounts Receivable / Revenue) × Days in period
DPO = (Accounts Payable / COGS) × Days in period
DIO = (Inventory / COGS) × Days in period
CCC = DSO + DIO − DPO
What each one tells you
- DSO is how long, on average, a sale stays unpaid. Lower is better; track it weekly.
- DPO is how long you take to pay suppliers. Higher means more vendor financing.
- DIO is how long inventory sits before sale. Lower means faster turns.
- CCC is the net days between paying for inputs and collecting from customers.
Working-capital FAQ
Common questions.
Should I use period-end balances or averages?
Averages are more accurate (average of opening and closing AR, AP, inventory). End-of-period balances are quicker to pull and good enough for trend tracking. Be consistent: do not mix averages with period-end across periods.
Why is DPO calculated on COGS, not total spend?
Accounts payable typically tracks inventory and goods purchases, so COGS is the right denominator. If your AP includes services and operating expenses (which most do), some analysts use total operating expenses instead. The calculator uses COGS as the standard, US-GAAP-aligned definition.
Can the CCC be negative?
Yes, and it is excellent. Retail (Amazon, Walmart) and software (annual prepay) often run negative CCC: customers pay before suppliers do. The business is financed by working capital itself. Negative CCC is a competitive moat.
How do I improve DSO quickly?
Tighter credit limits and credit-scoring at onboarding, faster invoicing (same-day, not month-end), dunning automation, early-pay discounts (2/10 net 30), factoring for the long tail. The biggest lever for most teams is dunning: from no follow-ups to a 4-step automated cadence usually cuts DSO by 5-10 days.
How do I improve DPO?
Renegotiate vendor terms across the top 20 vendors (Pareto: 20% of vendors are 80% of spend), consolidate vendors for leverage, use procurement card / corporate card for small-value spend (24-45 day float), and use supply-chain finance for strategic vendors who want early-pay options.
What is a "good" DSO?
Industry-dependent. IT services: 45-60 days. Manufacturing: 60-90 days. Retail: 5-15 days. Pharma: 80-120 days. FMCG: 30-45 days. Compare against your own historical trend and against direct competitors, not against unrelated industries.
How often should I track these?
DSO weekly (collections is a fast feedback loop). DPO and DIO monthly with the close. CCC monthly in the CFO board pack with quarterly benchmark comparison. Inside OneFinOps these metrics are continuous, computed off live AR, AP and inventory ledgers.
What is the difference between operating cash flow and CCC?
Operating cash flow (OCF) includes profit, depreciation/amortisation and tax, not just working capital. CCC measures the days cash is tied up in operations. They are related but distinct: a profitable business can have terrible CCC, and a marginal-profit business can have great CCC.
How does CCC relate to liquidity ratios like current ratio?
Liquidity ratios (current, quick) are point-in-time snapshots; CCC is dynamic. A business with current ratio = 2 might still have a CCC of 90 days, indicating cash is locked up. CCC is more useful for operational decisions, ratios for short-term solvency.
How does extending payment terms affect CCC?
Direct: every extra day of customer credit is +1 day on DSO and +1 day on CCC, increasing working capital tied up. The trade-off is sales growth: longer terms can win deals. Run the calculator both ways: at current DSO, and at "DSO if we offered 60-day terms instead of 30", to size the cash impact.
Related tools
More for cash and compliance.
- Working Capital CalculatorAR + Inventory − AP. See the absolute cash tied up in operations, not just the days metric.
- MSME Late Payment InterestCalculate the Section 16 interest you owe MSME suppliers when DPO stretches past 45 days.
- GST Late Fee CalculatorLate fees + 18% Section 50 interest for delayed GSTR filings.
- India Compliance CalendarGST, TDS, PF/ESI, PT, MCA and IT deadlines. The other side of the close clock.
DSO, DPO, CCC, in real time.
Continuous metrics from your live AR, AP and inventory ledgers inside OneFinOps. CFO and controller dashboards include trend, drill-down to invoice and benchmark.