DSO: 5 concrete levers to improve your average payment delay

In France, late payments immobilise over 20 billion euros in cash flow every year. For an SME or mid-sized company, a high DSO doesn’t mean the business is struggling, it means cash isn’t coming in at the right time. And that’s often enough to destabilise an otherwise profitable business.

The good news: improving your DSO doesn’t require reinventing everything. It’s often a few targeted adjustments,  around contractualisation, invoicing, and collections, that make the difference. Here are 5 concrete levers, ranked by impact.

Lever 1: Contractualise payment terms and methods from the order stage

DSO starts building before the first invoice is even issued. Too many businesses accept 60 or 90-day payment terms they never truly negotiated, they crept in gradually, out of habit or fear of losing the client.

The first step to improving your DSO is taking back control at the contractualisation stage. This comes down to two concrete elements:

Payment terms must be set in your general terms and conditions and contracts before any commercial discussion. The LME law caps maximum terms at 45 days end of month or 60 days from invoice date, but nothing stops you from negotiating shorter terms, especially with regular clients.

The payment method has a direct and often underestimated impact on your actual collections. Bank transfer (most common, most uncertain), bill of exchange or LCR (written commitment from the debtor to a fixed date), and direct debit (most effective, collection is guaranteed at a fixed date, independent of the client’s internal approval process).

Finally, requesting a deposit at the order stage reduces real exposure and tests the client’s solvency from the outset. A prospect who systematically refuses any deposit deserves close attention.

Lever 2: Invoice immediately upon delivery of the service

This is the simplest lever and the most neglected. In many cases, the contractual payment period runs from the invoice date. Every day of delay in invoicing is a day of delay in collection, regardless of the client’s behaviour.

In some activities, it’s the delivery date that triggers the payment period, making the invoicing process even more complex.

In consulting, audit, IT services, or construction, this gap can reach several weeks, sometimes several months on long assignments or multi-stage projects.

Reflexes to adopt:

• Issue the invoice on the same day as delivery or end of service
• Monitor in real time services rendered but not yet invoiced
• Alert project managers or team leads as soon as a gap is detected

This is precisely what CashNow’s FAE / Unbilled Revenue module enables: centralising mission progress valued in euros and identifying what is already generating value without having yet generated cash.

Also read: How to detect a payment risk from the quote stage?

Lever 3: Implement proactive and multichannel collections

Collections is the best-known lever and the most poorly applied. Classic mistakes: chasing too late, too irregularly, via email only, and with the same tone from the first reminder right through to formal notice.

An effective collections scenario to improve DSO rests on four principles:

Segmentation. Adapt the approach based on different criteria: key accounts versus standard accounts, risk profiles, nature of the activity (service, project with milestone billing, etc.)

Anticipation. A preventive reminder 3 to 5 days before the due date allows you to verify the invoice is properly registered in the client’s approval process. In large organisations, hospitals, local authorities, industrial groups, an unregistered invoice can sit unnoticed for weeks.

Cadence. A structured calendar: D-5 (preventive reminder), D+3 (first email chase), D+10 (email + call), D+20 (formal reminder), D+30 (formal notice), signals to your debtor that your follow-up is rigorous and systematic. Irregularity sends the opposite signal.

Also read: Collections: 10 mistakes that delay your payments

Combining channels. Email alone is too easy to ignore. A phone call at the right moment often unblocks a situation in minutes, a misunderstanding, an invoice not received, an approver absent. CashNow automates these multichannel sequences and adapts the tone at each stage, from a courteous reminder to a firm formal notice.

Lever 4: Formalise a dispute management process

An unresolved dispute means a blocked payment, sometimes on the full invoice amount, for a disagreement covering only 10% of the value. And in many businesses, disputes drag on not out of bad faith, but because there’s no clear process to identify, qualify and resolve them.

The most common causes in a B2B environment: an invoice not matching the purchase order, a quality or compliance dispute, a missing delivery note, commercial penalties applied unilaterally.

The golden rule: immediately separate undisputed amounts from those in dispute. You can demand payment of the undisputed portion while opening a resolution procedure for the disputed part. This is legally grounded and commercially defensible.

CashNow enables you to qualify the cause of each dispute, involve the right internal team (sales, order management, logistics) via a dedicated workflow, and set resolution commitments with tracked deadlines. BDO France, which works alongside CashNow on collections assignments, places dispute management at the heart of its methodology, identifying the blockage point from day one, to prevent a delay from becoming a bad debt.

See how BDO and CashNow divided payment delays by 3 for a major account

Lever 5: Manage DSO as a collective indicator, not just a financial one

This is the most structurally impactful lever and the most consistently overlooked. Improving your DSO sustainably means making it a shared indicator across the entire commercial and financial chain, not a figure reserved for the CFO or credit manager.

When a sales rep knows in real time that their client has 60 days of outstanding debt, they don’t negotiate a new order without informing accounts. When a project manager sees their portfolio showing a DSO of 80 days, they naturally push to invoice faster. When management tracks DSO evolution by client segment, they make better decisions on credit terms to extend.

Indicators to share beyond the finance team:

• Overall DSO and by segment (key accounts, SMEs, public sector)
• Collection rate at 30, 60 and 90 days
• Aged balance by sales rep, partner or business unit
• Unbilled revenue (FAE) amount
• Dispute rate and average resolution time

CashNow centralises these indicators in a dashboard accessible to both financial and commercial teams. Collections stops being an accounting matter, it becomes a performance lever managed collectively. This is exactly what BDO calls “change management”: supporting teams so that best practices become embedded over time.

What these 5 levers have in common

None of these levers works in isolation. Contractualisation without proactive collections changes nothing about the behaviour of slow payers. Collections without dispute management stalls on complex cases. Reporting without shared data remains a finance department exercise.

What makes the difference is the coherence of the system and its ability to adapt to each client’s profile. This is exactly what BDO and CashNow implemented to divide payment delays by 3 for a major real estate group and unlock 36 million euros in cash flow.

Want to assess your DSO and identify the priority levers for your business?

Contact us for a personalised demo.