Receivables. The first problem are the revenue numbers used to calculate Day Sales Outstanding (DSO). ... If there is VAT or GST in play, then the Trade Receivables number will include the sales tax and the revenue number will not.

Do you include VAT when calculating debtor days?

What about VAT? The trade debtors balance includes VAT as it represents the total amount due from customers. However, billings will not include VAT. Billings should therefore be grossed up for VAT when calculating trade debtor days.

How is the DSO calculated?

How Do You Calculate DSO? Divide the total number of accounts receivable during a given period by the total dollar value of credit sales during the same period, then multiply the result by the number of days in the period being measured.