Daily sales outstanding (DSO) is a critical business metric that professional services firms need to track to ensure growth, liquidity, and cashflow.
Delays in payments, issues with accounts receivables, and other risk factors can be optimized with the right PSA software solution.
Firms gain greater clarity on the payment cycle, while having set benchmarks that are automatically updated.
They can also chart workflows digitally, through project finance management software modules, and make the right decisions based on data reports.
Key flagging and notification systems can also be set when DSO is out of estimated levels, which can instantly inform managers to provide input.
Accounts receivable and collection teams can reach out to clients for tracking, while ensuring minimal project cost risk exposure.
Complete oversight over all processes
One of the main reasons why professional services firms opt for PSA solutions is to gain more clarity and control over all functional aspects.
From onboarding to delivery, key processes such as strategy, planning, and payments, can be monitored comprehensively through automatically updated metrics.
Managers can track payment cycles through professional services automation modules and identify root causes for delays.
This can significantly help reduce DSO for companies, as it can empower managers to make the right decisions for professional services firms.
Additionally, companies can identify key trends in cost-based decisions based on the DSO levels within payment cycles.
Larger DSOs can lead to issues with scaling up due to low liquidity, which can affect client acquisition and new project onboarding.
PSA software solutions can unite different reports to provide clarity for managers to improve DSO.
Digitizing sales workflows on cloud
Professional services firms that are aiming to expand need to benefit from the opportunities presented by digitization.
Online PSA solutions can digitize and automate the sales cycle, which can help reorient manual efforts towards timely payment collection.
Collections workflows can also be automated, informing clients of delayed payments earlier.
Additionally, data sharing for sales outstanding information can also be made more accessible with cybersecurity.
Teams can share invoice, estimate, SOW, PO, and contract information for reference and analysis, without worrying about leaks or information gaps.
Managers can provide tier-based access to teams to ensure timely collection, while sharing details with clients directly via PSA software access.
Faster issue resolution through PSA
A key benefit of adopting the best PSA tool is the increased transparency driven through automation.
Cloud-based PSA software solutions provide immediate resolution tools, chat and collaboration options, workflow-based modules, and other digital solutions to resolve any issue.
Expedited tracking and engaging with clients can be accomplished with the right PSA software.
In-depth reporting can be provided for projects, clients, and teams, which can help understand the reason behind delays in payment cycles. DSO can be optimized further, by analyzing average payment receipts for the portfolio.
Enhanced control over payment lifecycle
With PSA software solutions, companies can gain greater control over the payment lifecycle.
Project cost control, daily outflows, and accounts receivables can be managed comprehensively with the right modules and tools.
This streamlines the process, making it more collaborative and efficient, which ultimately decreases DSO.
Sales outstanding metrics can also be shared regularly with teams, with managers having greater control over receivables strategies and client engagement. Firms can also optimize their receivables terms if their DSO is too low, giving greater flexibility to sales teams during onboarding.
Professional services firms using a PSA software solution can benefit from lower DSO, as it optimizes all sales and cost-based processes.
Managers can make the right decisions much faster and have greater transparency across domains. They can also remotely communicate with collections and receivables teams to ensure timely payments.
The efficiency driven by automated reporting also helps managers identify risk factors for DSO earlier during project stages.