High DSO Isn’t a System Failure—It’s a People and Process Problem
Your balance sheet says the cash is there. Your systems show invoices were sent. But your working capital is trapped cash—aging on paper, unavailable in reality.
The truth is that high Days Sales Outstanding (DSO) isn’t only caused by system limitations. Technology can automate invoices and reporting, but it can’t fix the real drivers of the problem: misaligned policies, fragmented accountability, and weak connections between finance, sales, and customer service.
The Root Causes: Weak Credit, Lack of Accountability, Poor Visibility
High Days Sales Outstanding (DSO) isn’t just the result of slow-paying customers, these root causes come from breakdowns inside operations that stem from very human centric factors.
- Weak credit policies – overdue accounts kept ordering, while sales extended terms without guardrails.
- Fragmented accountability – finance, sales, and service all touched receivables, but no shared KPIs or escalation paths existed.
- Poor information transparency – driven by lack of ownership. Invoices sit in inboxes, spreadsheets are patched after mergers, invoice-level reporting is missing, and DSO isn’t tracked consistently because no one is accountable.
For many of the companies we support, these issues surface in every corner of the order-to-cash cycle. Legacy billing platforms and post-merger system sprawl delay invoicing by 30 days or more. Disputes pile up, credits age without reconciliation, and finance lacks clear ownership.
The result is predictable: trapped cash that reduces liquidity, inflates DSO, and destabilizes forecasts.
Case Story: Kinetix — System Sprawl and Unmanaged Disputes = Swollen AR
In the primary example given in our white paper, we talked about Kinetix Manufacturing, an amalgamation of several of our clients who ran into these challenges.
- Sales kept selling — orders continued to be booked even when customers were overdue or had shifted to net-90/portal-only terms, with no guardrails in place.
- Finance didn’t see the exposure — receivables visibility was delayed by fragmented billing systems and manual reporting, leaving aged balances hidden until they became critical.
- Service assumed disputes belonged elsewhere — customer disputes and credits were left unresolved because no function owned escalation, so balances quietly aged without action.
The lesson: this wasn’t a broken ERP problem—it was a communication and accountability breakdown.
The Triangle Fix: Finance, Sales, and Customer Success Must Align
Systems help with automation, but they can’t solve the deeper structural issues that cause Days Sales Outstanding (DSO) to rise. Technology will send invoices and generate reports, but it won’t:
- Resolve disputes – disagreements over billing or credits still require ownership and escalation across teams.
- Enforce credit policy – overdue accounts continue ordering unless sales, finance, and service apply consistent rules.
- Align incentives – without shared KPIs, sales chases bookings, finance chases collections, and service assumes someone else owns disputes.
The fix comes from connection, not code. When finance, sales, and customer success operate from the same dashboards and KPIs, receivables stop slipping through the cracks. Shared visibility ensures disputes are escalated early, credits are cleared before they age out, and overdue accounts are addressed with discipline.
Most importantly, The key is accountability: every function must share financial responsibility for receivables.
Finance owns DSO accuracy and reporting, customer success owns dispute escalation, and sales are held to account by tying commissions to reducing aged AR—not just bookings.
Linking pay to cash collected changes behavior: terms are extended more carefully, overdue accounts are addressed, and receivables stop drifting unchecked.
The solution reveals itself best when leading CFOs focus their efforts tackling the human factor. Instead of relying on system upgrades, they measure Days Sales Outstanding (DSO) precisely at the invoice and customer level, assign accountability across functions, and lock in visibility with dashboards that everyone can access.
The strongest results appear when incentives are tied directly to cash receipts—aligning sales commissions and management bonuses with actual collections. This creates shared accountability across finance, sales, and service, reinforced by structured collections that replace inboxes and spreadsheets with dashboards and playbooks.
Taken together, these human levers form the kind of working capital reduction strategies and accounts receivable best practices that reduce disputes, accelerate collections, and unlock liquidity—all without the need for a costly system overhaul.
You Don’t Need New Systems—You Need Connection and Accountability
The gains are clear: lower DSO, reduced aged AR, and stronger liquidity. For CFOs asking how to reduce DSO, the fastest wins don’t come from replacing systems. They come from process clarity, visibility, and shared accountability across finance, sales, and service.
➡️ For a deeper look at how leading finance teams are applying these practices, check out the CashConvert+ Solution Brief or download the full White Paper.
