How to reduce DSO (average customer payment period)

What is DSO and why measure it?

DSO (Days Sales Outstanding) measures the average payment period of your customers. It indicates how many days on average elapse between issuing an invoice and its actual collection.

Simple formula: (Customer receivables / Turnover incl. VAT) × 365 days.

Concrete example: a DSO of 45 days means it takes an average of 45 days to collect an invoice. The longer this period, the more pressure on your cash flow.

For Swiss SMEs, it is a key indicator: a high DSO increases working capital requirements and can create liquidity tensions.

The main causes of a high DSO

Several factors lengthen payment periods:

• Payment terms that are too generous: 60 or 90 days granted systematically
• Invoices sent late: several days after the service
• Invoicing errors: incorrect amounts, wrong VAT, missing details
• Lack of structured reminders: customers forgotten or reminded too late
• Poor payers: systematic delays not penalised

Identifying these causes allows you to act on the right levers to reduce your DSO.

Optimise payment terms from the point of sale

Reducing DSO begins even before the invoice is issued. The payment terms defined at the time of sale directly determine your collection period.

Do not systematically give in to requests for long payment terms. Every day granted impacts your cash flow.

Set clear rules from the quotation stage and mention them in your general terms and conditions. The more explicit you are upfront, the fewer difficult negotiations you will have later.

Define appropriate payment terms

The Swiss standard is 30 days net. This is a good balance between commercial competitiveness and cash flow management.

For certain sectors or new customers, you can negotiate 10 to 15 days. For high amounts or unknown customers, require payment on delivery or on order.

Clearly state these terms in your quotations, contracts and invoices. A customer informed from the start respects deadlines better.

Avoid granting 60 or 90 days without a strong commercial reason: every additional day weighs on your working capital.

Encourage early payment

Offering an early payment discount for immediate payment or at 10 days can accelerate collection. Be careful though: a 2% discount for 20 days advance represents a high annualised cost.

Calculate the real cost before committing. Our article on early payment discounts details these calculations.

Other options: payment on order for new customers, deposits of 30 to 50%, staggered payments with short deadlines.

Invoice quickly and without errors

Every day of delay in issuing the invoice lengthens your DSO. Invoice on the same day or the day after the service or delivery.

Use automated invoicing tools to avoid delays. Systematically check the accuracy of information: amounts, VAT (8.1%, 3.8% or 2.6%), customer details, compliant QR code.

An incorrect invoice delays payment by several weeks: the customer refuses it, you have to correct it, reissue it, and the deadline starts again from zero.

Swiss QR invoices facilitate payment and reduce input errors on the customer side.

Implement an effective reminder system

Reminders are the main lever for reducing DSO. Without structured reminders, customers pay when they want, often well after the deadline.

An effective reminder system combines planning, automation and appropriate tone. It is not about harassing your customers, but reminding them of their obligations in a professional manner.

Companies that systematically send reminders reduce their DSO by 15 to 30 days on average.

Plan reminders before the deadline

Do not start sending reminders after the deadline. Send a friendly reminder 3 to 5 days before the due date: this prevents oversights without being intrusive.

If payment is not received by the deadline, send a reminder immediately. Then at D+7, D+15 and D+30 with a progressively firmer tone.

Consult our invoice reminder email examples for each situation.

The earlier you send reminders, the faster you collect.

Automate payment reminders

Automating reminders ensures that no customer is forgotten and that reminders are sent at the right time, without manual intervention.

Set up automatic workflows: preventive reminder, reminder at deadline, post-deadline reminders. Customise messages according to the stage of delay.

Discover how to automate your reminders effectively.

BePaid offers configurable automatic reminders that save you hours every month whilst reducing your DSO.

Adapt the tone according to the situation

The first reminder should remain courteous and neutral: "We have not yet received payment for invoice X. Please regularise your situation."

Subsequent reminders become firmer whilst remaining professional: "Despite our previous reminders, invoice X remains unpaid. We ask you to proceed with payment within 5 days."

Preserve the customer relationship whilst being clear about your expectations. An appropriate tone accelerates payment without damaging trust.

Facilitate payment for your customers

The simpler the payment, the faster the customer settles their invoice. Offer multiple payment methods: Swiss QR invoice (standard), traditional bank transfer, online credit card.

Avoid obstacles: clear and visible bank details, QR code scannable directly from smartphone, direct payment links in your emails.

The Swiss QR invoice reduces input errors and speeds up the process: the customer scans and validates in a few seconds.

Every additional friction delays payment by several days.

Monitor and analyse your payment indicators

Beyond DSO, track other key indicators: late payment rate, average amount of unpaid invoices, list of slowest paying customers.

Segment your analysis by customer, by sector of activity, by invoice amount. Identify trends: do certain customers always pay late? Are certain sectors riskier?

Use dashboards and exports to visualise the evolution of your DSO month by month. Adjust your strategy based on measured results.

BePaid offers monitoring and export features to manage your payment indicators in real time.

Manage customers who are repeatedly late

Identify chronic poor payers: customers who systematically pay 30, 60 days late or more.

Possible options: renegotiate terms (mandatory advance payment, 50% deposits), reduce payment terms to 15 days, require payment on delivery for new orders.

In some cases, consider ending the commercial relationship if the financial risk is too high. A customer who does not pay is not a profitable customer.

Consult our guide on dispute management for extreme situations.

Tools and solutions to reduce your DSO

Invoicing software with automated tracking transforms DSO management. BePaid offers automatic reminders, real-time payment tracking, automatic bank reconciliation.

Cash flow dashboards allow you to visualise your DSO and its evolution immediately. Bank integration automatically detects payments received and updates your invoices.

Avoid manual management via Excel: it generates oversights, errors and wastes precious time.

Test BePaid for free (up to 10 invoices and 5 customers) to automate your tracking and reduce your DSO from the first month.

Reducing your DSO is not just about numbers: it is a comprehensive approach that improves your cash flow and secures your business. Clear payment terms from the point of sale, fast and error-free invoicing, structured reminders and simplified payment methods make all the difference. Every day saved on your collection periods gives you more room to invest and develop your business.

Automation plays a central role in this optimisation. It allows you to send your invoices immediately, schedule your automatic reminders and monitor your indicators in real time, without spending hours every week. BePaid supports you in this approach with compliant QR invoices, centralised tracking of your payments and configurable automatic reminders. Test our solution for free and see the impact on your DSO from the first few weeks.