The Half of DSO That SAP Finance Teams Can Actually Control

Days Sales Outstanding (DSO) remains a closely watched performance indicator in any finance organization. Every finance leader understands why it matters, and most teams work constantly to reduce it. Yet, according to John Bryant, Chief Revenue Officer at eSource Solutions, most of that effort targets the wrong half of the equation.

In a recent SAPinsider podcast, Robert Holland, Chief Research Officer at SAPinsider, sat down with Bryant to discuss why billing cycle time deserves far more attention from SAP finance teams, and why SAP systems make it so difficult to see.

Two Halves of the Same Metric

DSO measures the time between completing work and receiving payment. However, Bryant pointed out that most companies focus on the collection side of the equation when they talk about addressing DSO issues.

The trouble is that collections are the one part of the process a company cannot dictate. “You have no control over when somebody pays you,” Bryant said. “They’re going to pay you when they’re going to pay you. But on the other side of the equation, the billing cycle time, that’s 100% within the company’s control.”

That is because billing cycle time covers everything that happens before the payment clock even starts. It includes how long it takes to generate an invoice after work is completed, how many times that invoice bounces back and forth with the customer over quality issues or disputes, and how long it sits before final approval.

“The payment terms don’t start until the customer approves the invoice,” Bryant said. “If your DSO is 90 days and it takes you half of that time just to get to the point where you have an approved invoice, that’s a huge piece of the equation that is 100% in your control, and yet everyone seems to focus predominantly on the other side.”

Why SAP Systems Leave Finance Teams in the Dark

Bryant suggested that the problem is one of visibility. SAP environments provide robust reporting on outstanding receivables, payment terms, and customer contact history. They do not provide a comparable view of what happens inside the billing process itself.

“SAP doesn’t natively expose the data of who’s working on the invoice, or how long it has been sitting there,” Bryant said. For example, an invoice request may land with a billing specialist who is on vacation for two weeks; it may go to one of the two or three people who handle most of the team’s volume while others remain underutilized; or it may be rejected six times before acceptance because of repeated errors.

“SAP does not expose all that nuanced data,” Bryant explained.

The result, as Holland observed, is a challenge that leaves many finance teams operating with one hand tied behind their back. “Right now, we’re relying on billing managers to maintain this in-their-head knowledge base of what’s going on with the team,” Bryant said, “and we’re not providing the data to them to back up the intuition that we require them to have.”

The Hard-Dollar Case

This gap led eSource founder Kartik Shetty, after more than 20 years in SAP consulting, to build Get Billed, an SAP add-on that captures the billing data SAP already holds, adds the data points it doesn’t, and tracks trends over time. If a billing specialist who normally turns invoices around in two days suddenly takes two weeks, the tool surfaces that shift so managers can act on it.

The financial argument is straightforward. “For a billion-dollar company, every day that we can reduce DSO by focusing on the billing cycle time is saving about $2.7 million to the bottom line,” Bryant noted, citing a cost of capital in the 7% to 9% range. That improvement comes without changing how quickly customers pay.

Bryant also noted the market imbalance. “There are many tools out there to help you with the collection side of things,” he concluded. “There aren’t on the billing cycle time side.”

What This Means for SAPinsiders

Audit billing visibility before investing anywhere else. Bryant recommends two internal questions to start: “How long is it taking us to get invoices out the door, and what does the invoice quality look like once it has gone out the door?” The answers reveal where data exists and where it does not.

Treat billing cycle time as a distinct KPI alongside collections. Since payment terms begin only at customer approval, every day shaved from invoice generation and dispute resolution directly reduces DSO.

Quantify the opportunity in company-specific terms. A calculator at getbilled.io pulls public filing data to estimate the value of each recovered DSO day and can be broken down by business segment to build a case finance leadership will recognize.

Hear the full conversation. Robert Holland and John Bryant go deeper on where billing cycle time breaks down inside SAP environments, how Get Billed surfaces the missing data, and how finance teams can size the opportunity for their own organization. Listen to the complete SAPinsider podcast here.