Forecasting Cash Flow Using DSO, Days Sales Outstanding

CEUs Awarded: 0.1

This course provides a comprehensive understanding of how to forecast Accounts Receivable using historical DSO. We also cover the Cash Conversion Cycle (CCC) and its components, enabling participants to analyze the impact on a company’s working capital and cash flow. Learners will gain practical skills in cash flow forecasting, building and refining Accounts Receivable cash flow models using prior year’s data and industry benchmarks. The course explores the impacts of optimizing collections, reducing Days Sales Outstanding (DSO) through customer negotiations and technology integration. Participants will understand the importance of forecasting accuracy and continuous improvement through periodic reviews. A real-world case study reinforced the concepts learned, equipping learners with effective strategies for optimizing cash flow management.

Participants will:

1. Understand the concept of Cash Conversion Cycle (CCC) and its components: Days Inventory Outstanding (DIO), Days Sales Outstanding (DSO), and Days Payable Outstanding (DPO)
2. Learn how CCC is calculated
3. Analyze the impact of CCC on a company’s working capital management and cash flow
4. Forecast current year’s sales and cash flows using prior year’s data and industry benchmarks
5. Develop skills in building and refining cash flow models for effective cash management.
6. Identify patterns and anomalies in cash flow data through trend analysis and comparative studies
7. Explore techniques for optimizing collections and reducing DSO through customer negotiations and technology integration (ERP systems)

This is an On-Demand Course, allowing students to work independently and at their own pace to accommodate the time demands of busy professionals. After reviewing the presentations and course materials, the participant is required to take a final exam. Those who receive a grade of 70% or higher will receive an electronic “Certificate of Professional Development” from the Credit Research Foundation and earn 0.1 CEUs.