SPS Commerce Inc (SPSC)

Days of sales outstanding (DSO)

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Receivables turnover		11.46	11.39	10.95	10.86	11.43	11.73	10.35	10.32	11.15	10.35	9.16	9.31	9.31	9.97	8.59	9.44	8.85	9.24	8.57	9.05
DSO	days	31.84	32.06	33.32	33.62	31.92	31.11	35.27	35.35	32.74	35.25	39.85	39.19	39.20	36.60	42.51	38.66	41.23	39.49	42.59	40.34

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 11.46
= 31.84

To analyze SPS Commerce Inc.'s Days Sales Outstanding (DSO), we calculate the average DSO for each quarter provided in the table.

Average DSO for Q4 2023 = (31.84 + 32.06 + 33.32 + 33.62) / 4 = 32.96 days
Average DSO for Q3 2023 = (31.92 + 31.11 + 35.27 + 35.35) / 4 = 33.67 days

The average DSO for Q4 and Q3 of 2023 is 32.96 days and 33.67 days, respectively. It indicates that on average, it took the company around 32.96 days to collect its accounts receivable in Q4 2023 and 33.67 days in Q3 2023.

Comparing the average DSO over consecutive quarters, there appears to be a slight improvement in DSO performance from Q3 to Q4 2023. A lower DSO generally suggests that the company is collecting its receivables more efficiently, which can indicate a more effective credit policy and better liquidity management.

However, it is important to monitor trends over a longer period to assess the company's overall effectiveness in managing its accounts receivable. Additionally, benchmarking DSO against industry peers can provide further insights into its competitiveness and operational efficiency in collecting receivables.